Consumer confidence and spending continued to improve in 2016, but was affected by the Brexit vote and the US Presidential election, according to the latest Consumer Market Monitor from the Marketing Institute of Ireland and UCD Michael Smurfit Graduate Business School.

It says consumer spending rose by 4.2% in the first three quarters of 2016 but will likely be closer to 3.5% for the year as a whole, as international uncertainty made people reign in their outgoings.

This is one percent lower than the 4.5% growth achieved in 2015, but it is “still a very solid performance, which is better than any of our EU peers”, the research states.

The growth is said to be “significantly higher” than the growth in consumer spending in the UK, which averaged 2.8% in 2016, and Germany which averaged 1.9%.

Rising employment and wages have helped to keep consumer spending on a positive footing, however, with growth expected to continue in 2017.

Commenting on the report, Professor of Marketing in the UCD School of Business Professor Mary Lambkin said: “A reason for optimism is that the fundamental factors underpinning the consumer economy are still very strong, and should provide a counter-balance to any external shocks – in particular, the level of disposable income in the economy has grown back to almost €100 billion, close to the peak in 2008, driven principally by the large increase in employment, and this feeds through into consumer spending.”