THE 14-YEAR LOW
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BY SEAN MURPHY
SOARING energy costs have knocked consumer confidence to a 14-year low with the public now tightening their belts like it’s 2008.
The Irish Consumer Sentiment Index shows surging bills and the outlook for household finances sent confidence plummeting back to the worldwide economic crash.
People were surveyed for this month ahead of the sharp increase in energy bills, grocery prices, and borrowing costs over the coming weeks.
Few respondents expect next week’s Budget to offset the now daily economic strains that have accumulated in recent months, according to analysts.
Only one-in-10 in believe measures will “substantially offset cost of living difficulties for all households”. As many as one-in-three fear higher inflation, with some estimating average extra costs of roughly €3,300 could hit households across the country. And one-in-four are hopeful that the Budget will help ease inflation.
Overall, the Irish consumer sentiment index fell from 53.1 in August to 42.1 in this month – which is the lowest since the 42.0 figure of October 2008 during the global recession.
An analysis of the Irish Consumer Sentiment Index was carried out by KBC
Bank chief economist Austin Hughes who said: “Sharply higher energy bills on living costs in coming months has prompted a significant downgrade of general economic prospects.
“It is a particularly sharp deterioration in the outlook for household finances.
“The drop in Irish consumer confidence in September was unusually large but is not entirely surprising.
“Sharply lower sentiment likely reflects the damaging impact of almost relentless bad news in relation to living costs during the survey period. Chief among these was a succession of announce
ments of large and looming increases in energy bills.
“But this was overlaid with increasing pressures in other areas such as food prices and back-to-school costs, as well as the prospect of larger and longer-lasting increases in interest rates.”
Mr Hughes added that Irish consumers are “bracing themselves for notably greater problems ahead”.
He explained: “The prospect of markedly higher energy bills through the winter months, allied to more broadly based inflation pressures, threaten a marked adjustment in living standards and spending.”
This month’s poll of 1,000 adults by Core Research for the Irish Consumer Sentiment Survey was conducted between September 4 and 15.