Replies to questions in the \u00adCredit \u00adUnion Consumer Sentiment Survey \u00adindicate that many consumers are bracing themselves for a major hit to their finances as the year progresses with rising bills and the cost of living.<\/p>\n
It comes as the Economic and Social Research Institute (ESRI) think-tank and the Central Bank both warned of inflationary pressures in the economy as higher oil prices begin to bite.<\/p>\n
The ESRI predicted headline \u00adinflation in the Irish economy will rise this year and next.<\/p>\n
A more prolonged conflict in the Middle East with an extended spike in energy costs could see \u201cprice rises across a wide range of goods and services\u201d resulting in higher inflation and a dampening of economic activity. Even if the conflict ends soon there will be a lasting impact on prices here, it said.<\/p>\n
The environment facing consumers is notably more threatening<\/p>\n
Consumers have reacted to the \u00adenergy crisis prompted by the war by planning to rein in spending in the coming months, according to the Credit Union Consumer Index, compiled in partnership with Core \u00adResearch.<\/p>\n
The index for this month shows a reading of 56.7, sharply down on the 65.2 figure for last month and the \u00adlowest since March 2023.<\/p>\n
Economist Austin Hughes, who oversees the compiling of the index, said this month\u2019s survey paints a picture of a nervous Irish consumer whose thinking has become materially more negative of late.<\/p>\n
\u201cThe dramatic escalation in hostilities in the Middle East in the past month means the environment facing consumers in Ireland and elsewhere is notably more threatening in the sense that it is now unstable rather than uncertain, with the immediate risk of a large and lasting deterioration in households\u2019 economic and financial circumstances,\u201d he said.<\/p>\n
Mr Hughes said the scale of the drop in the index between last month and this month is broadly similar to that seen in the wake of the announcement of increased US tariffs last April. <\/p>\n
This suggests that this month\u2019s sentiment reading might be interpreted as a marked downgrade rather than a complete collapse in Irish consumer confidence. This month\u2019s reading marks a big turnaround from an improvement that resulted in an 11-month high in last month\u2019s sentiment survey.<\/p>\n
Global developments suggesting the prospect of substantial increases in prices<\/p>\n
Mr Hughes said it is a result of the reaction of consumers to the threat of higher energy costs and what it implies for economic activity and consumer prices. <\/p>\n
This month\u2019s index shows a large \u00addeterioration in consumers\u2019 expectations for their financial circumstances over the next 12 months.<\/p>\n
This element of the survey declined to its weakest point since March 2022 when Russia\u2019s invasion of Ukraine threatened a marked escalation in living costs for Irish consumers, Mr Hughes said.<\/p>\n
He said the rapid rise in motor fuel and heating-oil prices through this month\u2019s survey period, and global developments suggesting the prospect of substantial increases in electricity and gas prices, was leading consumers to brace themselves for a major hit to their spending power as the year progresses. <\/p>\n
This means households are becoming more cautious in their spending.<\/p>\n","protected":false},"excerpt":{"rendered":"Replies to questions in the \u00adCredit \u00adUnion Consumer Sentiment Survey \u00adindicate that many consumers are bracing themselves for…\n","protected":false},"author":2,"featured_media":367858,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,3361,943,113,61,60,3362],"class_list":["post-367857","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-charlie-weston","tag-cost-of-living","tag-economy","tag-ie","tag-ireland","tag-money-experts"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/367857","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=367857"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/367857\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/367858"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=367857"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=367857"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=367857"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}