NI consumer confidence falls as prices rise: Danske Bank
Consumer confidence fell in Northern Ireland at the end of last year as prices rose, according to a new report.
The Danske Bank consumer confidence index found respondents were less confident about their current and future finances and job security – and were also less likely to splash out on expensive things.
Inflation soared to 5.5% in January, up from 5.4% in December, with prices going up for everyday items like clothing and shoes.
Energy has also soared in price, with households paying more for their gas and home-heating oil, while petrol has hit a record high of 148.02p per litre.
Danske Bank said that rising prices were likely to restrain consumer spending this year, after predictions that it would increase as the post-pandemic recovery takes hold.
But at 25%, a slightly higher proportion of respondents said the post-Brexit trading arrangements in Northern Ireland were having the most negative impact on their confidence levels, while 24% cited higher prices.
The percentage of people concerned about higher prices had grown from 18% in the previous quarter.
Meanwhile, 12% of respondents said the continuation of some coronavirus restrictions at the end of the year was having the most negative impact on them, although a similar percentage had felt encouraged by the easing of other restrictions up until that point.
However, 40% said they’d felt buoyed up by the rollout of the coronavirus vaccine programme.
While one in four said their finances had improved in the last 12 months, a slightly higher percentage believed their finances were worse than they had been one year earlier.
Danske Bank chief economist Conor Lambe said inflation had rocketed in the last year, from just 0.7% in January last year to 5.5%.
“The rise in inflation has been brought about by a number of factors including higher energy prices and supply chain disruption contributing to an increase in the price of goods.
“Looking forward, the rate of price rises is expected to move even higher over the coming months.
“High inflation erodes households’ purchasing power and our survey shows that inflationary pressures are becoming an increasingly negative driver of consumer confidence levels.”