Bank of Ireland has released its latest Economic Pulse today. The Economic Pulse surveys are conducted by Ipsos MRBI on behalf of Bank of Ireland with 1,000 households and approximately 2,000 businesses on a range of topics including the economy, their financial situation, spending plans, house price expectations and business activity.
The Bank of Ireland Economic Pulse rose slightly in October 2019 as the risk of a Halloween Brexit crash out receded. The index, which combines the results of the Consumer and Business Pulses, stood at 77.0 in October, up 0.8 on the previous month but 15.6 lower than a year ago.
Budget 2020 and Brexit formed the backdrop to this month’s survey, with the former framed around a potential no deal scenario come October 31st. Political advances made towards striking a new deal helped the business mood, but the survey shows that this wasn’t enough to lift consumers out of their malaise.
The Consumer Pulse fell 4.5 points to a fresh low of 69.9 in October, the fourth consecutive month it has fallen. Households were gloomier about the economy and their own finances, with buying sentiment also taking a knock as Brexit weighed on minds and Budget 2020 did little for consumers’ pockets.
Just a quarter of those surveyed considered it a good time to purchase big ticket items such as furniture and electrical goods (down from a third in September), while one in two (a series high) indicated that they are holding out on spending because they are not certain which way economic policy is going to go.
The Business Pulse stood at 78.8 in October, 2.2 higher than in September but down 14.3 on a year ago. Budget 2020 included a support package in the event of a no deal Brexit, but with the UK Parliament passing legislation to prevent such an outcome and Downing Street working towards agreeing a new deal with Brussels, the risk of a Halloween crash out receded.
This contributed to the uptick in business sentiment in October, though the picture was mixed across the sectors with the Services and Construction Pulses gaining ground but the Retail and Industry Pulses slipping back. Looking further ahead, the October data indicates that growth ambitions are holding steady, with three in five firms planning on expanding in the next 1 to 3 years.
Commenting on Bank of Ireland’s October Economic Pulse research, Group Chief Economist for Bank of Ireland, Dr Loretta O’Sullivan said, "October’s Economic Pulse was a touch firmer as the risk of a no deal Brexit at the end of the month receded, and hopes of a last minute deal grew. The survey findings suggest that households aren’t overly convinced by recent developments though, with consumer sentiment tracking lower again this month and one in two indicating they are holding out on spending."
She added, "However, there was a sense of relief among firms that a Halloween crash out was increasingly unlikely and business sentiment edged higher. That said, the mood remains relatively subdued overall reflecting the fact that there is no such thing as a ‘good’ Brexit outcome."
Source: www.businessworld.ie
