NI consumer confidence hits 'surprise' two-year high

Consumers still plan to spend despite increases in the prices of some goods, says Danske Bank

Household spending plans in Northern Ireland appear unfazed by Brexit and rising inflation, a survey suggests.

Danske Bank publishes research quarterly, based on a survey of 1,020 people.

It found consumer confidence "rose sharply" in the first quarter of 2017 to its highest level in two years.

Bank economist Conor Lambe said consumers believe the short-term impact of the referendum "is not going to be as severe as first thought".

According to the survey, household expectations of their financial positions for the year ahead have improved.

'Planning to spend'

Mr Lambe said that was "surprising given that rising inflation will have an adverse impact on real wage growth as we move through this year".

Inflation is running at 2.3%.

The depreciation of the pound since last June's EU referendum has also that meant some imported goods are more expensive.

"Prices are rising but consumers in Northern Ireland are still planning to spend over the next 12 months," said Mr Lambe.

But he added that the bank expected a slowdown in spending, with a squeeze already appearing to be underway across the whole of the UK.