CONSUMERS REMAIN very concerned about their personal finances but are marginally less gloomy about economic prospects generally, according to a report published yesterday.
The KBC Ireland/ESRI Consumer Sentiment Index shows the vast majority of consumers reporting a worsening of their finances last year, with only 3 per cent saying the situation will be reversed this year. It finds people may have actually welcomed the IMF/EU bailout as a move which brought a degree of certainty to the country’s economic future.
The index fell in December to 44.4 from 48.4 in November, and 53.3 in December 2009. It is still some way above its all-time low of 38.9 of July 2008. The average over the 15 years that the index has been used as a measure of consumer confidence stands at 90.2.
David Duffy of the ESRI said the main driver of weakening sentiment was “a more negative perception of the current environment, primarily relating to concerns about personal finances”.
A separate report published yesterday shows the number of people with a negative view of the current savings environment growing. The Nationwide UK (Ireland) Savings Index fell by 12 points to 77 in December. Some 51 per cent of people polled said they thought Government policy – specifically increases in Dirt tax announced in the Budget – had discouraged saving.
Despite this negativity, the numbers putting money aside continues to rise and 37 per cent of people are now saving regularly, up from 34 per cent in November.
The major retail banks have rubbished reports they are considering discontinuing fixed rate mortgages in favour of variable rates. Allied Irish Banks, Bank of Ireland and KBC Homeloans all said while their products were reviewed on an ongoing basis, they had no plans to drop fixed rate mortgages in the months ahead.
