DUBLIN (Reuters) - Irish consumer sentiment edged slightly lower last month, a survey showed on Monday, the details of which hinted at an uptick in uncertainty and nervousness on the part of Irish consumers, according to its authors.
Consumer confidence sank to its second-lowest reading of the year following nearest neighbour and key trading partner Britain’s decision to leave the European Union in June and had recovered most of its post-Brexit fall by the end of August.
The KBC Bank Ireland/ESRI Consumer Sentiment Index fell back to 102.0 in September from 102.7 in August, remaining around the levels seen for most of the last 12 months but well below the 15-year high of 108.6 hit in January.
“At one level, the headline results might seem to point towards an element of stability in Irish consumer confidence and it is consistent with a reasonably positive assessment of economic prospects,” KBC chief economist Austin Hughes said.
“However, in view of the improvement in employment and incomes thus far in 2016, it might have been expected sentiment would show clearer and consistent gains. Instead, see-saw monthly fluctuations appear to indicate a measure of unease.”
Hughes said rather than Brexit, Dublin’s decision to appeal a 13 billion euro back tax bill handed to Apple (AAPL.O) by the European Commission likely affected responses, as well as the prospect of limited income gains in next week’s budget.
Ireland’s economy is set to be the best performing in the European Union for the third successive year in 2016, with growth of over 4 percent forecast. But many feel the recovery has been slow to filter through much of the economy.
“While issues such as the Apple ruling are unlikely to be resolved any time soon, the sentiment survey emphasises the need for the upcoming budget to gently support rather than shock Irish consumers,” Hughes said.
Reporting by Padraic Halpin; Editing by Toby Chopra