Consumer spending rises while affordability improves, AIB data shows

Ireland is a relatively small economy in the eurozone, but European Central Bank president Christine Lagarde said sustainable consumption growth will lead to further interest rate reductions

Spending in pubs and off-licences was down 10%, while restaurants declined 6% in the month.

Consumer spending increased last month annually amid cooling inflation, pointing to further economic recovery which may contribute to the European Central Bank (ECB)’s decision to reduce interest rates further.

A report published by AIB showed spend was up 4% in annual terms last month and up 7% in June. The pace of inflation stayed steady at 2.2% last month.

Ireland is a relatively small economy in the eurozone. However, at the last monetary policy meeting, European Central Bank president Christine Lagarde said sustainable consumption growth will lead to further interest rate reductions.

The bank cut interest rates for the first time after aggressively hiking rates since July 2022, and the regulator is poised to make another reduction at its meeting next month.

Leisure spending was up last month as improved affordability led to splurges on hotels and cinema visits, which may have also been driven by cooler weather throughout the month.

Spending in pubs and off-licences was down 10%, while restaurants declined 6% in the month,

Uniform shopping was up as households prepare for the beginning of the school term.