Irish consumers and businesses upbeat as Brexit fears ease

Almost half of workers expect pay rises in 2020, while companies see Brexit fog lifting

Bank of Ireland’s Loretta O’Sullivan says survey findings suggest households and firms have put Brexit on the back burner for now, but  it is ‘really only the end of the beginning.’ Photograph: Dara Mac Dónaill

Bank of Ireland’s Loretta O’Sullivan says survey findings suggest households and firms have put Brexit on the back burner for now, but it is ‘really only the end of the beginning.’ Photograph: Dara Mac Dónaill

 

There was little evidence of the January blues for businesses or consumers as 2020 got under way, according to the latest snapshot of sentiment from Bank of Ireland’s Economic Pulse study.

The bank said both households and companies had put the risks associated with Brexit to the back of their minds for now, while almost half of workers are expecting to see a rise in their pay packet over the coming year.

The index, which feeds into a European Commission study of EU-wide sentiment that has been running since the 1960s, rose to a reading of 86.1 in January, which is 3.1 points higher than in December, though still 1.8 lower than it was 12 months ago.

‘Positive note’

Bank of Ireland group chief economist Loretta O’Sullivan said the year had started “on a positive note”, but the Brexit effect still lingered.

“The survey findings suggest that households and firms have put Brexit on the back burner for now, but as the negotiations about the new relationship between the UK and the EU are just getting going, it is really only the end of the beginning,” she said.

“Reflecting this, sentiment is below where it was a year ago and remains well off pre-referendum highs.”

With sterling rallying against the euro and global trade tensions also easing, companies in industry and services expect their export order books to strengthen in the period ahead, the index found.

While 47 per cent of workers believe they will see their pay rise this year, 43 per cent of companies said they expected to increase pay, with the average wage rise anticipated to be in the order of 3.6 per cent.