Cost of living: Inflation hits NI consumer confidence

Consumer confidence in Northern Ireland fell sharply in the first quarter of 2022 as inflation hit household finances, a Danske Bank survey has suggested.

The latest survey was carried out in the second half of March with 1,003 people.

More than 40% of people expected their financial position to worsen over the next year.

Only 18% believe their finances will be in a better position in 12 months.

In comparison a survey conducted in the final quarter of 2021 found at that time only 26% of people expected their financial position to deteriorate in the year ahead.

In terms of spending, 38% of respondents said they expected to spend less on expensive items over the next year, compared with 26% who anticipated spending more.

However, there is a broad expectation that the jobs market recovery will be sustained.

When asked about job security, 13% of people expected to become more secure in their jobs, while 61% expected no change in job security and only 8% thought their job security would worsen.

Danske Bank chief economist Conor Lambe said: "In Northern Ireland and the wider UK, consumer spending accounts for a considerable proportion of economic activity and is therefore an important driver of economic growth.

"Inflation has already increased sharply and is likely to rise even higher in the months ahead, exerting a further squeeze on consumer spending."

The UK main rate of inflation, the Consumer Price Index, stood at 7% in March but is expected to rise higher when the April statistics are released this week.

Last week, two of Northern Ireland's biggest food companies warned consumers to expect further price rises this year.

Food production inputs like fuel, fertiliser and animal feed have experienced rapid inflation over the last year.

Dale Farm chief executive Nick Whelan said only about half of that inflation had been passed to consumers.

That was echoed by Justin Coleman, director at Moy Park, which is one of Europe's biggest chicken producers.

"I don't think the full force of food inflation has hit retail shelves yet," he said.