Household finances in the North took a hammering from high inflation in the final quarter of the year which in turn pushed consumer confidence down to its lowest level in four years, new analysis shows.
The latest Danske Bank Northern Ireland Consumer Confidence Index registered another sharp drop in the final quarter of 2017, continuing a trend which had persisted throughout the year.
Danske Bank’s chief economist, Conor Lambe, said high inflation was not the only issue Northern Ireland consumers battled with over the year.
“It’s safe to conclude that the factors negatively impacting confidence outweighed the factors having a positive impact.
“More than a third of survey respondents said that political uncertainty and the lack of a Northern Ireland Executive had the largest negative impact on their confidence levels.
“The rate of price rises also had a detrimental effect on confidence levels, 16 per cent of consumers stated that the impact of high inflation on their household finances had the largest negative impact on sentiment,” Mr Lambe said.
But the latest Danske Bank index also suggested that despite an interest rate rise in November around 19 per cent of people in the North still said that low interest rates had the “largest positive impact on their confidence levels” in the last quarter.
Mr Lambe said all of the feedback from the index suggests that consumers expect to remain under pressure again this year and are less likely to spend on high value purchases such as holidays and furniture over the next 12 months.
They also do not expect to be able to save more in 2018 than they did last year.
