Irish consumer sentiment ‘steady, but not stable’

Cantillon: Brexit brinkmanship looms over economic outlook

Irish consumers finished the year in a worse mood about the economy and their personal finances than they were 12 months previously. Photograph: Aidan Crawley

Irish consumers finished the year in a worse mood about the economy and their personal finances than they were 12 months previously. Photograph: Aidan Crawley

 

Deteriorating consumer confidence may have contributed to a waning of economic sentiment across the euro zone and the EU as a whole last month, according to European Commission figures, but Irish consumer sentiment held up in December.

Holding up, however, is not exactly the same as holding firm.

The latest KBC Bank Ireland/ESRI Consumer Sentiment index for the last month of 2018 shows that the overall reading was unchanged on November – the first time there has been no movement since 1998 – but within this taking of the overall temperature, worries about the economic outlook have increased sharply.

Last year was also only the second in eight years that Irish consumers finished the year in a worse mood about the economy and their personal finances than they were 12 months previously.

The reason should, by now, be obvious: the UK is gambling with its own economic health and that of others by dicing with a no-deal Brexit through its ongoing commitment to blinkered political brinkmanship.

As a result, Irish consumer sentiment is “steady, but not stable”, as KBC Bank Ireland chief economist Austin Hughes put it. He also had this caveat: “Our sense is that Irish consumers continue to have considerable difficulties in assessing both the likelihood and possible impact of potentially important changes in their circumstances in the year ahead.”

In other words, Brexit is such an unusual act of self-sabotage, that no one can anticipate – or be reasonably expected to anticipate – what the impact of a no-deal, cliff-edge, all-bets-off one would be. A rollercoaster may still lie in waiting.

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