The Government’s deal on promissory notes should boost consumer confidence, according to Ibec. Launching a new Irish Consumer Monitor report, the business group said it expected consumers’ discretionary incomes to stabilise in 2013 and increase slightly in 2014.

Mortgaged working households will see the greatest gain in spending power as they benefit from low mortgages, unemployed households and retirees will not fare so well, partly due to rising healthcare costs.

“Spending power” is defined by Ibec as after-tax income less bills such as mortgages, energy and health. “In the absence of further bad news, consumer sentiment should recover during 2013. However, any unforeseen shocks pose a risk to the fragile recovery seen to date,” said Ibec economist Reetta Suonperä.