Consumer confidence continues to rise but businesses appear slightly more pessimistic - according to the latest Economic Pulse from Bank of Ireland.

Sentiment among businesses softened in the month, according to the study, with thinner order books likely to lead to muted activity and hiring.

Companies appear to be concerned by the impact of Brexit and the weaker pound - though some also expect that to translate to lower import prices in the near future.

However, consumers are in much more positive mood - with three in five now expect the general economic condition to improve over the next year.

"We've seen a divergence open up over the past couple of months between consumer and business confidence with households generally more positive," said Bank of Ireland Chief Economist Loretta O'Sullivan.

"They look to have batted off the impact of Trump and Brexit and are more positive about the economy in general, the outlook for unemployment, taking comfort from the fact that the domestic economy is growing, and is creating jobs."

That confidence is filtering through to the real economy, too, with 40% of people considering it a good time to make a big ticket purchase.

"If we look at the data that's come through in terms of retail sales, we are seeing solid consumer spending," Ms O'Sullivan said.

"What is underpinning people's forecasts for the Irish economy is a continuation of consumer spending, as well as an improvement in the residential construction side and commercial construction side.

However, sentiment has dipped amongst businesses - which Ms O'Sullivan says displays a more cautious outlook amongst companies.

"[It is] reflecting the fact, over the past couple of weeks in particular, that we've seen some signs of softening activity in the UK," she said. "The pound is down, which is reinforcing the message that there are clouds on the horizon and firms are very cognisant of these."

Businesses appear to be anticipating a muted period in terms of activity and hiring, which sits somewhat at odds with the 50% of consumers who are expecting unemployment to fall further in the coming months.

Ms O'Sullivan suggests that this divergence is coming as a result of businesses seeing the first-hand impact of Brexit - which consumers have so far been largely shielded from.

"I think it's the case that businesses are probably more on the ground, and they're at the forefront in terms of these effects," she said. "Particularly on the sterling - it's straight up an impact on margins."