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DUBLIN (Reuters) - Irish consumer sentiment surged to its highest level in 16 months in June, a survey showed on Tuesday.
It followed strong Irish economic data and signs that support in next-door Britain for a hard exit from the European Union may have weakened.
Ireland's economy has been the best performing in Europe for the last three years, dramatically cutting unemployment, but households have complained the wealth has not trickled down and Brexit -- to which Ireland is particularly vulnerable -- has hit confidence about the country's future.
The KBC Bank Ireland/ESRI Consumer Sentiment Index surged to 105.0 in June from 100.5 in May, its highest level since February last year, though well below the 15-year high of 108.6 posted in January 2016.
The survey showed 52 percent of consumers expect the Irish economy to strengthen in the year ahead, the first time a majority of consumers have expressed this opinion since the British referendum last year.
KBC chief economist Austin Hughes described the surge in the main index as "slightly surprising".
"The scale of the improvement ... may reflect relief that the threat of a hard Brexit is seen as reduced because of the outcome of the recent UK election as well as reassurance from the continued strength of recent Irish economic indicators," Hughes said.
Britain's election in June deprived Conservative Prime Minister Theresa May of a majority in Britain's parliament, making it harder for her to get legislation through, including on Brexit.
Irish unemployment fell to 6.3 percent in June, down from 15 percent five years ago, while the government collected 4 percent more tax in the first half of the year than in the same period last year.
The election last month of Ireland's youngest ever prime minister, Leo Varadkar, could also have had an impact on sentiment, the survey's authors said.
But while confidence around the wider economy is high, only 28 percent of consumers feel their own financial circumstances will improve in the coming year.
"This hints at a potentially troublesome disconnect between the perceptions of consumers and recent warnings about an overheating Irish economy," Hughes said.
Reporting by Conor Humphries