Fears of euro collapse add to consumers’ nervousness

EURO break-up worries, a tough budget and fears of further pain to come are making consumers more nervous, according to the latest KBC Bank Ireland/ESRI Consumer Sentiment Index.

The index plummeted to 49.2 from 60.1 in November, the largest monthly drop since August 2001. The decline in December came after an abnormally large rise in October.

KBC Bank Ireland chief economist, Austin Hughes, said: “Such sharp gyrations are extremely unusual in the sentiment survey. The average monthly change in the Index is around 0.3 points. Indeed, the 16-year history of the sentiment survey suggests we should only see monthly changes of 10 points or more about once every 18 months.