Consumer confidence at record low as no-deal Brexit looms

Consumer confidence at record low as no-deal Brexit looms

Irish households are pessimistic about the economic outlook as the growing possibility of a no-deal Brexit looms, according to the Bank of Ireland’s latest economic survey.

The bank’s monthly economic pulse showed consumer confidence was at its lowest point since the monitoring began, Bank of Ireland said.

Group chief economist at the bank, Loretta O’Sullivan, said: “It was less a case of the January blues and more a case of the Brexit blues this month.

“Reflecting this, the Economic Pulse rang in the new year more or less where it rang out the old — on a soft note.

“Uncertainty about how the UK will leave the EU has reached fever pitch in recent weeks, with talk of a no-deal Brexit to the fore. “The analysis published last week by the Central Bank shows that a disorderly Brexit is an especially bad outcome for the Irish economy.

“Households are well aware of this, as their gloomier assessment of economic prospects in this month’s Pulse survey testifies.”

Ms O’Sullivan said that on the business front, sentiment held steady in January, but remains at a low ebb.

The squeeze on exporters is continuing, with the pound falling to over 90p against the euro at the end of last year amid the heightened political drama in the UK, albeit it has recovered some ground since

Meanwhile, ECB governing council member Klaas Knot said the European economy doesn’t show any signs of falling into a recession.

“The European economy is doing pretty well, and even though capacity utilisation is high and unemployment low, this isn’t leading to inflation,” the Dutch central bank president said.

“I do find talk about a crisis, even talk about a recession in Europe, somewhat premature.”

Mr Knot said slowing growth makes sense after years of economic expansion.

The central banker’s comments follow a week in which the ECB said risks to euro-area economic growth have “moved to the downside” after a series of disappointing data from 19-nation region.

Additional reporting: Reuters

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