Consumer sentiment saw a sharp deterioration in September as fears over the economy and people's personal finances returned.
The KBC Bank Ireland/ESRI Consumer Sentiment index fell to 60.2 in September, down from a near five year high of 70 in August.
The fall reversed most of the improvement seen earlier this year and the index is now at its weakest level since February.
Some of the decrease was blamed on intense speculation on a range of potentially painful Budget adjustments.
Doubts emerged about the extent of European support for Ireland's adjustment programme, while there were also some high profile job losses.
''For most of the past nine months, the improvement in sentiment reflected a gradually broadening view that the worst might be over,'' commented KBC's chief economist Austin Hughes.
''The September survey results suggest consumers are no longer sure that is the case. As a result, the fear factor has returned,'' he added.
The economist said that consumers are beginning to calculate the probable impact on their household finances of substantial cuts in heath and welfare spending and a new property tax. They are also having to deal with the news of looming increases in energy bills.
He also said the September reading emphasises how fragile the improvement in confidence has been this year.
In light of the sharp deterioration in consumer sentiment, Mr Hughes urged the Government to reduce uncertainty ahead of the Budget in so far as is possible.
''The fragility of both sentiment and household spending power among Irish consumers would also tend to argue that the overall scale of adjustment in December's Budget should be no greater than the minimum amount consistent with Ireland's continued adherence to its EU/IMF programme targets,'' he added.
