Interest rate rises and increased fuel prices continued to damage consumer confidence in August, according to the latest consumer sentiment survey from Irish Intercontinental Bank (IIB) and the ESRI.

The IIB Consumer Sentiment Index fell to a reading of 84.8 in August from 90.9 in July, reflecting falls in its two component indicators.

The Index of Current Economic Conditions fell to 99.2 in August, from 105.7 in July, while the Current Expectations Index fell to 75.1 in August from 80.9 in July.

ESRI economist David Duffy said more consumers were expecting a decline in future economic conditions. "Consumers feel that economic news has been negative over the past month, citing higher interest rates and rising prices," Mr Duffy said.

In response to additional supplementary questions - carried out especially for the August survey - 83 per cent of consumers cited rising energy costs as the most pressing concern for their personal finances.

Some 30 per cent felt they may not have adequate finances to handle further rate hikes. When asked what was the biggest risk to Ireland's economic outlook, 48 per cent cited higher energy costs, 23 per cent cited rising interest rates and 12 per cent cited a sharp increase in the general cost of living.

According to figures released last week by the Central Statistics Office (CSO), the rate of inflation continues to accelerate, rising from 4.2 per cent in July to 4.5 per cent in August.

Austin Hughes, chief economist of IIB, said the figures pointed to a squeeze on personal spending, but that there was little risk of a fall in house prices. "The bulk of respondents do not see higher borrowing costs denting the outlook for house prices. This may suggest that day to day spending, particularly spending of a discretionary nature, may bear the burden of adjustment."

Despite rising interest rates, 89 per cent of respondents said they were confident that house prices would rise in the coming 12 months, compared with just 82 per cent in June.