Cost of living clouds mean Irish consumers don’t see economic sunshine in July

Posted on: 28 Jul 2026

• Slight slip in Irish consumer sentiment at odds with confidence gains in US,UK and the Euro area

• Outlook for household finances hit by renewed inflation fears

• Layoffs and AI concerns continue to weigh on job prospects

• Little evidence that good weather brightens consumer mood  

• Special survey question asks what consumers see as the most pressing issue facing the Irish economy;

  • 42% say cost-of-living pressures

  • 15% say housing shortfall

  • 7% say economic impact of global conflicts

  • 4% say excessive Government spending

Speaking on the release of the July sentiment data and analysis, David Malone, CEO of the Irish League of Credit Unions noted; “The July survey results are disappointing but not entirely surprising in that they highlight the continuing pressures Irish consumers face from rising living costs. What stands out in this month's findings is that concerns about the cost of living continue to outweigh all other economic issues by a significant margin. Despite some positive economic developments in recent months, many consumers remain focused on the day-to-day realities of managing household budgets. For support and guidance through life's varied financial challenges and opportunities, members can always rely on the support of their local credit union.”      
 

Summary

Irish consumer sentiment fell marginally in July, suggesting continuing concerns around pressures on living costs as well as an uncertain economic outlook.

The July sentiment reading doesn’t signal any major change in the mood of Irish consumers. The slight softening might be viewed as disappointing given lower retail fuel costs, a  slight easing in inflation, generally positive forecasts for the Irish economy and exceptionally fine weather through the survey period.

However, there was also a renewed escalation of military action in the middle east with an accompanying spike in global oil prices, warnings of higher future food prices, increases in domestic electricity prices, further ‘tech’ layoffs and ongoing warnings about AI-related threats to jobs. As a result, economic and financial developments have been mixed of late. 

A significant domestic element to many of these concerns as well as survey timing differences may go some way to explaining the divergence the between softer sentiment in Ireland and somewhat stronger confidence readings elsewhere in July.

The sentiment survey is focussed on the economic and financial circumstances of Irish consumers. A fairly basic statistical comparison of climate and consumer confidence data suggests Irish consumer sentiment has not been markedly moved by unusually good or bad weather in recent years.

Overall, the subdued sentiment reading for July chimes with responses given to a special question in this month’s survey on the most pressing economic issues facing Ireland. Cost of living pressures are far and away the most important factor in Irish consumer thinking at present and have become even more of a focus in the past twelve months. 

Section I; Sentiment survey signals consumer concerns slightly greater in July

As the table below indicates, the Credit Union Consumer Sentiment Survey (in partnership with Core Research) shows a slight and statistically insignificant drop to 61.6 from 62.2 in June. The effectively unchanged reading in July follows gains in the two preceding months that reversed roughly three quarters of the sharp drop between February and April that followed the outbreak of the war on Iran.
 

 
The July reading leaves the sentiment index well below the long-term survey average of 83.2, emphasising significant perceived difficulties in Irish households’ economic and financial circumstances at present.

However, the July sentiment index at 61.6 is modestly higher than the 59.1 reading for July 2025 (when US tariff threats intensified and the Irish Government signalled that Budget’26 would not contain a cost-of-living package). Irish consumer sentiment is also effectively unchanged from the 60.5 average of the twelve months to June, implying that the pressures now facing Irish consumers are not entirely new.

Don’t blame it on the sunshine…(blame it on the Budget?)

Although the economic sky remains shrouded in threatening clouds, the Irish jobs market appears to be cooling, and many households are seeing outlays rising faster than incomes, Irish consumers enjoyed some exceptionally warm and sunny weather through the July survey period.

While this translated into more time enjoyed outdoors with family and friends, the fractional drop in consumer sentiment between June and July doesn’t suggest a clearly sunnier disposition in consumer thinking about the economic and financial environment.

As the diagram below illustrates, Met Eireann data show mean temperatures at Dublin Airport (used as a rough shorthand for conditions nationwide) have tended to run above their long-term seasonal averages in the past couple of years. However, a threatening economic climate means consumer sentiment has consistently been below its long-term average. 
 

 
To get a broad sense of whether weather conditions play a material role in the fluctuations in Irish consumer sentiment, we did some fairly basic statistical analysis of data from recent years. 

We calculated the correlation coefficient between monthly changes in the deviation from long term average temperature and monthly changes in consumer sentiment over the period February 2023 to July 2026.

The estimated correlation coefficient was -0.3 which would hint at a relatively weak link at most, and, because of the negative sign, might suggest a spurious tendency for warmer weather conditions to be associated with weaker consumer sentiment. Our interpretation of these fairly limited results is that relatively warm weather doesn’t seem offset economic chills for Irish consumers.

We repeated the exercise using global solar radiation as a very rough proxy for sunshine amounts for the months between April and September which we compared to changes in consumer sentiment. In this instance, the estimate of correlation coefficient was -.02. Again, we think this weak result suggests no clear relationship between the extent of summer sunshine and the economic mood of Irish consumers. 

We repeat our emphasis on the crude nature of this exercise but the results might suggest that in spite of the conversational preoccupation with Irish weather, consumer thinking on economic and financial matters is based on hard and currently harsh realities rather than unusually hot or cold air.

Consumers are less anxious in US, Euro area and UK in July   

The slight fall in Irish consumer sentiment in July was at odds with a sharp and broadly-based improvement in US consumer sentiment, a third consecutive month of improvement for Euro Area consumer confidence and a significant recovery in UK consumer confidence.

The authors of the US sentiment report cite easing price pressures at the pump ( US Energy Information Agency data show gasoline prices falling from $4.63 per gallon on May 11^th to $3.91 on July 6^th). They also note that the bulk of the survey was completed before renewed US strikes on Iran and an associated rise in retail gasoline prices later in the month. 

The continued improvement in Euro Area consumer confidence may also reflect a less negative outlook for energy prices and broader inflation prospects than that seen by Irish consumers. It may also owe something to the stronger than expected resilience of the Eurozone economy of late. That said, the divergence between Irish and Euro area sentiment in July is not easy to explain, maybe consumers in some Euro area countries were boosted by participation in the World Cup! 

UK consumer confidence also saw a sharp improvement in July which GFK, the authors of the report partly attribute to a ‘Burnham bounce’ on expectations that the new Prime Minister would tackle cost-of-living pressures and longstanding economic growth problems.

The UK survey authors also suggest some of the July improvement might be related to England’s participation in the World Cup. Tellingly, the survey concluded on July 14^th while England lost to Argentina on July 15^th. The survey dates also mean that the full extent of the renewed build-up in Middle East hostilities through late July did not register.   

Irish consumer sentiment sees slight but broadly based fall

In marked contrast to developments elsewhere, all of the five main elements of the Irish consumer sentiment index were lower in July than in June, even if the decline was very limited in each instance.

Our sense is that the slightly softer Irish reading for July reflects the significantly offsetting influence of a range of factors, with domestic-centred developments and timing slightly outweighing more positive influences that set the tone for corresponding surveys elsewhere.

That the change in consumer thinking on the economic outlook was only fractional is not entirely surprising especially in a July survey period that saw National accounts data emphasise the volatility of the multinational sector but continue to paint a generally encouraging picture of domestic economic activity.  

Other encouraging developments included the Industrial Development Authority reporting a pick-up in overseas investment into Ireland in the first half of this year while Intel announced a planned major capital spend.

The sequence of positive reports and forecasts for the Irish economy also continued. So too did now familiar caveats in the shape of general warnings about an uncertain global outlook and specific domestic concerns about an over-reliance on exceptional corporation tax revenues. 

On balance, July saw little to markedly alter consumer thinking on the broad economic outlook, much less to shift the longstanding negative tone of sentiment in this regard.

The July sentiment period did see a good deal of negative news on the outlook for jobs, with a further spate of layoff announcements including high-profile job losses at Aer Lingus, TikTok, and some Microsoft subsidiaries.

Various reports continued to emphasise AI-related threats to employment while official data showed a slight increase in unemployment in June and a marginal reduction in payroll employment in May.

Although the weakening in consumer sentiment in relation to jobs was limited in July, this largely reflects sharp declines previously which mean the jobs element of the sentiment survey has shown the largest deterioration over the past twelve months.   

Irish Consumers are a little more worried about the outlook for their household finances  

Irish consumers assessments’ of how their household finances had changed over the past twelve months fell fractionally in July, effectively signalling an unchanged and significantly negative view overall.

A slight easing in inflation in June, largely driven by falling fuel costs but also influenced by a marked slowdown in food price inflation likely helped but ongoing increases in living costs, coupled with the cumulative impact of significant price hikes in recent years, continue to translate into markedly negative consumer thinking in regard to household financial circumstances.

In the commentary on the June sentiment survey, we highlighted how Irish consumer confidence tends to go in the opposite direction to changes in energy costs. As retail fuel costs continued to fall back in July, the reasons for the weakening in consumer thinking  in relation to the outlook for household finances in this month's survey may need to be explored.

First of all, it should be noted that while the June survey was in the field, the price for a barrel of Brent crude on global markets fell by nearly $ 20, from $96.75 to $77.45, whereas there was an increase of almost $18, from $71.65 to $89.55 through the July survey.  

Painful experience has taught Irish consumers how quickly retail prices here respond to increases in global energy costs. The sense of a marked deterioration in the prospects of a near-term peace deal in the Middle East would have added to these concerns.

In addition, the Irish Government announced the phased reversal of excise duty cuts on fuel from September while some electricity providers raised their tariffs from the beginning of July. Not surprisingly, consumers also marked down their assessment of current buying conditions in this month’s survey.
 

Section II; What issue do Irish consumers think matters most to the Irish economy? 

As usual, the Credit Union Consumer Sentiment Survey (in partnership with Core Research) included supplementary questions on topics of current interest.

For the July survey, we repeated a question from a year ago, asking consumers what they think is the most pressing issues facing the Irish economy over the next couple of years.

One intention was to assess the extent to which Irish consumer thinking matches or deviates from the policy priorities being set by the Government in the upcoming Budget. In this context, it should be noted that the wording of the question focusses on issues facing the economy as a whole rather than those facing the consumer personally.


 
As the diagram suggests, for Irish consumers, cost-of-living pressures completely dominate all other considerations as the most pressing issue the economy is likely to face in the next year or two.

The focus on cost of living has increased somewhat in the past twelve months. Some 42% of consumers now signal this as the major concern facing the Irish economy, up materially from the 37% who gave this response in the 2025 survey.

In the same vein, a sense of the notably increased focus on cost-of-living concerns, is suggested by the gap between it and the next most prominent response, housing, which increased from 18 percentage points in 2025 to 27 percentage points in 2026.

In a narrow sense, the increased concern around cost-of-living pressures might be attributed to a notably higher inflation rate now than a year ago-in June 2025, inflation stood at 1.8% whereas the most recent official data show inflation at 3.4% in June 2026. 

However, we continue to emphasise that what matters to consumers is not the twelve-month measure of price changes focussed on by economists but the broader trend in living costs.

In this context, it should be highlighted that the cumulative five-year increase in Irish consumer prices to June 2026 was 24.5%, more than ten times the cumulative 2.3% seen in the preceding five years. This comparison gives a clearer sense of the sharp living cost shock now weighing on Irish consumers.      
 
All demographic groupings cited the cost of living as the most pressing issue but the degree to which this was the case varied somewhat. Greater proportions of consumers outside Dublin gave this response than those in the capital, possibly reflecting greater spending on transport as well as comparatively modest incomes.

Cost-of-living concerns also figured somewhat more prominently in responses from females than males. Those having difficulty making ends meet were nearly 50% more likely to cite cost-of-living as the most pressing concern than those without problems in this regard.

Those aged between 45 and 64 were almost 30% more likely to give this response than other age groups. This may reflect some combination of post-peak or constrained growth in earnings coupled with significant ‘fixed’ or pre-committed household outlays including groceries, heating, insurance and education costs. This set of circumstances means any significant increase in living costs weighs heavily on these consumers even if household incomes appear reasonable.

15% of consumers indicated that a shortfall in housing supply is the most pressing issue facing the Irish economy for the next couple of years, down from the 19% reported in the comparable 2025 survey. One might argue that this reflects a marginal improvement in housing supply of late but the case could equally be made that living cost pressures have simply emerged as a more immediate and, perhaps, more universal concern.

Housing was cited as the most pressing issue more frequently among those aged 35 to 44 and those aged under 25, possibly reflecting problems both initially accessing accommodation as well as moving when household needs change. There were no substantive differences in the prevalence of this response across income levels or related to difficulty making ends meet. This broad pattern is consistent with a shortfall in housing across all tenures and most price ranges.

The concentrated concerns  of Irish consumers suggested in the diagram above tends to reflect a clear hierarchy of needs, with food and shelter firmly most prominent. Undoubtedly some element of the 7% of consumers citing the economic impact of current major conflicts were influenced by the consequences for living costs.

Most other concerns might be unkindly described as ‘specialist sports’ in the eyes of Irish consumers at present.  As in the 2025 survey, only 2% of consumers cited inadequate infrastructure as the most pressing issue for the economy in the next one or two years. We would interpret this relatively small response as reflecting the view that the shortfall in housing is seen as the major pressure point in relation to infrastructure and the area in which shortcomings in energy and utility delivery are most immediately obvious.

These survey results continue to suggest that consumer thinking is at odds with most official or mainstream economic commentary in relation to the immediacy of concerns around the public finances. While there has been an increase in the share of those concerned about excessive Government spending, at just 4% of consumers it is not widely seen as the most pressing issue facing the Irish economy in the coming twelve to twenty-four months. On similar lines, just 3% of consumers, unchanged from 2025 see over-reliance on corporation taxes as critical at present.     
    
This is not to say that Irish consumers are entirely blind to risks to the public finances. Instead, it may simply reflect the view that a fiscal stance that ignores current pressures on household finances is likely to prove far less sustainable, economically, socially or politically than one that offers a reasonable measure of support to household finances.       

The Credit Union Irish Consumer Sentiment Survey is a monthly survey of a nationally representative sample of 1,000 adults. Since May 2019, Core Research have undertaken the survey administration and data collection for the Survey. This month’s survey was live between the 2^nd and 20^th July 2026