Consumers seek end of Brexit gloom

A lifting of the Brexit gloom and the relief of Britain ruling out crashing out of the EU would likely spur Irish households to spend more on pricey consumer items, a leading economist has predicted.

Austin Hughes, chief economist at KBC Bank Ireland, said that a definitive political agreement in Westminster that rules out a hard or no-deal Brexit would likely help Irish consumers spend on consumer durables.

KBC’s latest monthly consumer survey, which it carries out with the Economic and Social Research Institute showed Irish consumers, showed they remained worried by Brexit.

Brexit uncertainty was weighing on spending decisions despite consumers feeling slightly happier about their finances since February, according to the survey. Mr Hughes said that a lifting of the Brexit threat would spur Irish economic growth.

Stock markets showed some signs of optimism over a possible soft Brexit compromise as talks between Prime Minister Theresa May and Labour leader Jeremy Corbyn got under way.

Irish and British shares which are most exposed to the UK earnings and Brexit risks, including the banks, were also boosted by hopes of global trade war truce.

AIB shares climbed 4% and Bank of Ireland rose 2.75%. CRH, which generates half its earnings from the US, gained over 3% on those trade hopes. Sterling eased to 85.46p as the euro was boosted by unexpectedly good figures on the eurozone services economy.

“Hopes of a US-China deal are still the big driver” for stock markets, said Chris Beauchamp, chief market analyst at online broker IG.

“You might think that the market is bored of trade war headlines, or ones suggesting progress anyway, but the revival in equities over the past few days suggests that the stock market is still very keen on a deal being done, with the potential for existing tariffs to be reduced or dropped entirely,” said Mr Beauchamp.

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