Consumer confidence has dropped to its weakest level in more than a year.

Higher fuel bills, rising rents and property price inflation are thought to be weighing on sentiment.

The pull-back also reflects growing global risks and lack of domestic feel-good factor.

June’s reading points to a guardedly positive, if more cautious, mood among consumers.

The KBC Bank/ESRI Irish consumer sentiment index fell to 102.1 in June from 106.7 in May, the second-largest monthly decline in the past 20 months.

KBC Bank economist Austin Hughes said the fall in the index does not suggest the average consumer has experienced any dramatic worsening in their economic circumstances.

Instead, the poorer sentiment reading for June likely emphasises how fragile confidence and the financial circumstances of many consumers remain, even after several years of strong recovery in activity and employment in the economy.

The survey shows increased caution on household finances, with monthly declines in all three elements of the survey concerned with consumers’ spending power and plans.

However, Mr Hughes said: “It should be noted that in each instance positive responses continue to exceed negatives.

“So consumers continue to report some measure of progress in their personal financial circumstances, but the sentiment survey emphasises how modest and uneven this has been.”

Only one in four consumers takes the view that their household financial situation has improved in the past year.

A similar number expect gains in the coming 12 months. Consumers are less optimistic about the outlook for jobs, Mr Hughes said.

Indo Business