With households basking in the late-summer heatwave and looking ahead to Budget 2023, the latest Bank of Ireland Economic Pulse recovered some losses this month, though it remains subdued, at just under its Covid-19 low point.
Commenting on the August Economic Pulse, Dr Loretta O’Sullivan, group chief economist for Bank of Ireland, said, “Recent shocks to the Irish economy – Brexit, the Covid-19 virus and Russia’s invasion of Ukraine – have been idiosyncratic in nature, and their after-effects are still playing out, making for uncertain times.
“The removal of pandemic-related restrictions earlier this year is a tailwind, and employment has rebounded strongly, but the deterioration in UK-EU relations of late is a headwind, and elevated global energy prices – as a result of the war – are adding to inflation.”
O’Sullivan noted that while the Consumer Pulse recovered some losses this month, it remains subdued.
“The squeeze on households’ purchasing power and [the] unsettled environment for businesses have tempered confidence, though the August Pulse findings point to some respite in this respect,” she added.
“With households expecting the Budget to provide some support for their pockets and firms seeing some easing in non-labour input costs, the mood was a little better this month, and the Economic Pulse rose for the first time since May.”
According to Bank of Ireland, the uptick this month was ‘reasonably broad based’ across the components.
The data indicated that households were less downbeat about the current state of the economy and their own finances and – with an eye to the forthcoming ‘cost of living’ Budget – lifted their expectations for both over the coming year.
The research showed that only 15% of the respondents surveyed considered August a good time to purchase big-ticket items, such as furniture and electrical equipment.