Irish Consumers Gloomier on Cost Concerns in October

Posted on: 24 Oct 2025

• Sentiment slips to 3-month low on worries around household finances
•  Rising costs and reduced fiscal supports prompt pullback in spending power and threatens increased ‘feel-bad’ factor
•  ‘Macro’ sentiment largely unchanged on quieter global economic backdrop
• Special question focusses on expected changes in household incomes and costs in 2026
  • Three out of four consumers expect living costs to increase in 2026, with one in four expecting a ‘large’ increase
  • Only one in three consumers expect income gains in 2026   
  • Grocery and energy bills are areas where most see costs rising  

Summary

Irish consumer sentiment fell to a three-month low in October as rising living costs and reduced fiscal supports threatened a difficult winter for many households and an associated outbreak of ‘feel-bad’ among consumers.

The monthly change in sentiment might be regarded as relatively modest given that Budget ’26 measures are expected to drain spending power for the majority of consumers and there has been a renewed and high-profile pick-up in inflation of late.

However, expectations had been ‘managed’ by a clear signalling of the intention not to provide a cost-of-living package for several months. It is also the case that sentiment is materially lower than a year ago 2024, with Irish consumers now notably more negative about their household finances than in the wake of the previous Budget.     

Section I; October sentiment survey suggests Irish consumers becoming more negative about their household finances  

As the table below indicates, the Credit Union Consumer Sentiment Survey (in partnership with Core Research) shows an index reading of 59.9, in October, down from 61.7 in September and just marginally above the 59.1 figure reported for July when tariff concerns appeared to threaten a markedly poorer outlook for the Irish economy.

Some sense of the fairly downbeat tone of Irish consumer confidence at present is suggested by a comparison of the October 2025 reading of 59.9 with either the 74.1 figure reported for October 2024, the long-term survey average of 83.7, or even the 67.0 average of the past twelve months.
 

US consumers not spooked by Government shutdown

The slippage in the latest Irish consumer sentiment survey contrasts with a steady reading in the preliminary October reading of the comparable US measure notwithstanding the shutdown of the Federal Government in the ‘States.

The compilers of the US sentiment survey suggest that a still positive economic outlook, positive equity markets, and healthy household finances at present are combining to broadly offset continuing consumer worries about the threats of stronger price increases and a weaker jobs market.  
 

Irish ‘macro’ picture largely unchanged but ‘micro’ worries increase

While four of the five elements of the Credit Union Consumer Sentiment Survey (in partnership with Core Research) were lower in October than September, the weakening was concentrated in those elements focussed on household finances.

A marginal softening in thinking on the outlook for the Irish economy was more than offset by a slightly larger improvement in thinking on the outlook for jobs. In neither case did the monthly movement suggest a marked change in consumer thinking of late.

Although there were no dramatic global developments through the survey period, repeated official references to downside risks facing the Irish economy in the run-up to Budget ’26 may have resonated with consumers in October.

Against this, the continuing resilience seen in most activity indicators of late coupled with Dept of Finance projections envisaging only a modest slowdown in domestic growth in the coming year probably limited any tendency towards increased negativity in this regard.

With news-flow on jobs still largely positive, employment growth continuing and unemployment subdued, concerns around the outlook for the labour market didn’t change materially in October and, with thinking already fairly negative in this respect, a slight bounce doesn’t signal any meaningful change in sentiment.
 

Pressure on spending power steps up

The decline in Irish consumer sentiment between September and October was concentrated in those elements of the survey focussed on consumers’ own financial circumstances.

Expectations for a 'giveaway' Budget were very limited. Responses to a special question asked in the September sentiment survey indicated that only one-in three consumers expected Budget 2025 to improve their living standards, with the vast bulk of these expecting only a slight fiscal boost.

Judged from this perspective, this aspect of the October survey might seem to suggest that Budget '26 failed to clear a fairly low bar in terms of its expected impact on household finances. 

The month-on-month weakening in those elements was not dramatic, but it was sufficient to translate into the poorest assessment of household finances over the past twelve months since December 2023 and the second poorest assessment of future household finances since September 2023 (August 2025 was slightly weaker in that regard).
 

Are things as bad as sentiment suggests?

Irish consumers current negative assessment of household finances may seem at odds with official data showing average wages rising faster than consumer prices, and/or with recently revised estimates that (at least) currently suggest some recovery in household incomes in late 2024 and early 2025. A range of reasons may be put forward for this seeming divergence between experienced and economic ‘realities’.

First of all, ‘average’ measures may obscure major differences in current conditions across the spectrum of Irish consumers (in this context, concerns are emerging about a notably more skewed set of circumstances across US consumers of late). CSO data indicate that in 2023, the average disposable income of the top 20% of households in Ireland was €163k, nearly five times the €35k average disposable income of the bottom 20% of households. In practice, this translates to vastly different economic conditions and financial capacity that may be masked in aggregate income and spending data.

Reflecting the outsized impact of higher salaries on average earnings, roughly two thirds of employees earned less than ‘average’ earnings in 2024 and median earnings rose more slowly than average earnings between 2022 and 2024, hinting that a cohort of consumers may not have been caried higher on any recent ‘tidal’ turn towards faster income growth. In the same vein, lower income households tend to spend more on necessities and have less discretionary spending power that can be reined in when difficulties arise.

A somewhat similar issue arises because of the ‘domestic’ aspect of the sharp increase in food prices of late. A significant portion of the increase in areas such as meat prices translates into higher agricultural incomes in Ireland thereby underpinning ‘average’ economy-wide incomes but also understating the additional pressure on living costs for significant numbers of households outside the Agricultural sector.   

A second consideration is that the persistence of upward pressure on consumer prices may have exhausted any remaining financial headroom for some households even if, on average, incomes are now increasing as fast or faster than consumer prices.

CSO data suggest the lowest 40% of households had negative savings every year between 2010 and 2023, meaning they were poorly positioned to cope with the surge in prices in 2022 and 2023. Some sense of the impact of cumulative strains on household finances may be suggested by the continuing increase in arrears in residential electricity and gas bills in the latest data for mid-2025.

Third, consumer concerns around the cost-of-living are likely to be underpinned by a range of estimates, from the Dept of Public Expenditure and Reform, the Parliamentary Budget Office and the Economic and Social Research Institute, all suggesting that Budget ’26 changes to welfare rates, the end of ‘once-off’ cost-of-living supports, and the absence of any indexation of direct taxation will leave many consumers worse off in the coming year.   

Fourth, consumers may be sensing a renewed acceleration in the prices of key goods and services of late. Official inflation data show price pressures in many areas intensifying of late. The pick-up in Ireland’s headline inflation rate between August and September was the largest in almost two years.
 
September inflation figures also showed meat prices increasing at their fastest rate in two and a half years, clothing prices rising at their fastest rate in two years and energy prices, which had been curbing inflation recently, registered the first year-on-year increase in two years. The official inflation data also show childcare costs posted their first year-on- year increase in 3 years in September and the rise of 3.8% was the fastest since September 2009. 
 
In the same vein, grocery price data from Worldpanel showed a continuing pickup to 6.5% in October, the fastest pace since December 2023. With EU data showing energy prices pick up during the October survey period and significant media focus on looming increases to Local Property Tax charges, it is not at all surprising that many consumers may fear that continuing cost-of-living pressures will cause them real difficulties in the months ahead.  
 
While financial strains may be a key concern for significant numbers of Irish consumers at present, both widespread variations in individual circumstances and increasing numbers living and working here mean that it is likely to slow rather than stop overall growth in consumer spending into 2026.   

This view is broadly consistent with the Dept of Finance’s Budget Day forecasts that envisage ‘real’ or inflation-adjusted consumer spending increasing by 2.3% in 2026 after a 2.9% increase in 2025.

While the Department of Finance sees global energy price developments and exchange rates moving in a direction that would curb Irish inflation and also notes that a somewhat weaker domestic environment will dampen domestic price pressures, it predicts that the price deflator for consumer spending will pick up to 2.4% from 1.9% this year. Irish consumers seem to fear a faster increase in their living costs in 2026.    

Section II; Prices, what crisis? Do consumers expect costs to keep rising in 2026?

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

In light of conflicting thinking on the current trajectory of household living costs and incomes, this month’s survey asked a representative sample of Irish consumers how they felt their incomes and various elements of their household living costs might evolve in 2026.

We asked consumers how much and in which direction they expected their household income and various elements of their living costs to change in 2026. In an effort to standardise responses, we defined ‘large’ as a change of more than 5% in either direction, ‘moderate’ as being a change of between 2% and 5%, and ‘slight’ as being between 1% and 2%.  

First of all, we asked about the overall change expected in household living costs and incomes. The responses are shown in the diagram below. 

Three out of four Irish consumers (76%) expect their household living costs will increase in 2026, with one in four consumers (25%) expecting their costs to rise by a large amount (i.e. more than 5%).

In contrast, just one in three consumers (34%) expect their household income to increase in 2026 and only one in twenty-five consumers (4%) anticipates a large increase in household income.    

In the same vein, just 11% of consumers expect their household living costs to fall in 2026 but twice as many consumers (22%) think their household income will be lower next year.

The broad message of these responses is that there is a widespread expectation among Irish consumers that, both in terms of scale and spread, increases in household living costs will clearly outpace any gains in income in 2026.

While answers varied across all demographics, older consumers were more likely to anticipate significant increases in household living costs next year and less likely to envisage lower costs than younger consumers. Those having difficulty making ends meet were more likely to expect a material increase in household living costs than those not having problems currently in this regard.  

The October 2025 Credit Union Consumer Sentiment Survey (in partnership with Core Research) also asked consumers to indicate how they felt various elements of their household living costs were likely to evolve in 2026. Responses to this question are shown in the diagram below.


As the diagram illustrates, most Irish consumers expect increases rather than declines in most areas of their household living costs in 2026. The most widely expected sharp increases are in areas such as grocery and energy bills where close on four in five consumers envisage higher outlays in the coming year, and roughly three in ten are braced for large increases in these areas.

However, the balance of responses points towards higher expected costs in all the main categories of household spending. The only area with a notable expectation of lower costs is in relation to going out and entertainment. We judge that this relates to a likely pullback in discretionary spend that may weigh on the viability of some domestic facing businesses. We would not regard this specific result as indicating any expectation on the part of Irish consumers that the Budget reduction in VAT on hospitality would alter the trajectory of pricing in that sector.

The broad and material nature of expected price increases across most areas of household outlay, coupled with muted expectations for income gains, suggests that many Irish consumers are now bracing themselves for a difficult year ahead. As a result, a pronounced ‘feel-bad’ factor may become a persistent element in Irish consumer sentiment for some time to come.  


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 tranche of the survey was live between the 2^nd and 15^th October 2025.