DUBLIN (Reuters) – Irish consumer sentiment recovered sharply from a seven-year low in November, posting its fastest monthly rise since 2015 as the risk of a damaging no-deal Brexit receded, a survey showed on Tuesday.
Ireland has remained the European Union’s fastest growing economy during three years of Brexit talks but consumer confidence was hit earlier this year when the prospect of Britain leaving without an agreement rose.
The KBC Bank consumer sentiment index rose to 77.1 in November from 69.5 in October, helped by a fresh Brexit deal that Prime Minister Boris Johnson hopes to ratify after a Dec. 12 election. That was back to the level it stood at in August but still well below its reading of 96.5 a year ago.
“While official data published through the survey period point towards rising incomes and subdued inflation, we think the main driver of the change in November was a scaling back of Brexit worries,” KBC Bank Ireland chief economist Austin Hughes said.
“This outcome appears consistent with the idea that Irish consumers were viewing their world through slightly less dark-colored Brexit glasses as the immediate threat of a ‘crash out’ Brexit disappeared and were replaced by expectations of an orderly transition period through the year ahead.”
Hughes said the improvement was most marked in the survey’s forward-looking readings and while that reflected an easing in worries rather than “a sense that all is wonderful”, it may translate into healthier spending during the Christmas period.
(Reporting by Padraic Halpin; Editing by Christina Fincher)