Almost half of the Republic's households are braced for a tough Budget, according to a consumer sentiment survey released yesterday.

The latest IIB Bank/ESRI consumer sentiment index suggests 42 per cent of households expect the forthcoming Budget to leave them slightly worse off, with only one in nine expecting an improvement in their economic circumstances.

The survey shows consumer confidence declined for the fourth consecutive month in October, as concerns grew about personal finances and the wider economy. Confidence declined from 70.3 on the index in September to 65.9 in October, a new low for the series.

Optimism about the coming year is shown to have weakened, with three out of five consumers expecting the economy to falter over the next 12 months.

Mr Austin Hughes, chief economist with IIB Bank, said consumer sentiment could remain negative for some time. He warned pre-Christmas sales may be weaker than in recent years.