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Hopes for recovery take a blow as Irish consumers increase savings

The Nationwide/ESRI savings index shows a significant increase in the amount of cash that worried consumers are keeping aside.

IRELAND’S HOPES FOR a recovery in its domestic economy have taken another blow, as a new report finds that uneasy consumers are keeping more and more of their money in savings and aren’t willing to spend.

The monthly Nationwide UK (Ireland)/ESRI Savings Index showed an increase for July, as shoppers opted to keep their money stashed away for fear of a further deterioration in the economic environment.

The ESRI said the increase had been driven by a major jump in the Savings Environment sub-index, as more consumers feel encouraged to keep money aside.

The increase in savings comes despite a 3 per cent drop in the numbers who believe now is a good time to save. 37 per cent of the survey’s respondents said they felt now was a bad time to save.

A third of respondents said they were saving between €51 and €100 per month, up by 5 per cent from the previous survey in June, while the numbers saving €26 to €50 per month was up from 17 per cent to 23 per cent.

Brendan Synnott of Nationwide UK (Ireland) said savings concerns were not age-specific, “as it is being expressed by those over and under fifty years of age. Irish consumers are anticipating more uncertainty to come in the future.

“While Ireland is no longer at the centre of the continuing economic crisis, the bigger European and global dimensions that are now the focus of attention suggest that we are moving even further away from the restoration of consumer confidence and therefore willingness to spend.”

The savings index, which had stood at 98 for June, had been at 128 in May – leading some to hope that consumers were becoming more willing to spend their money and get the economy moving again.

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