Consumer sentiment hit a 56 month low in July, according to the latest monthly monitor from KBC Bank Ireland.

It follows two back to back months of rising consumer confidence and contrasts with slight improvements in Europe, the UK and US.

The fall also came despite growth in the spending power of households.

Brexit was the main driver of the fall in sentiment but other global factors and warnings about the domestic economy may have contributed.

"While the July confidence reading for the UK hints at a 'Boris bounce', it appears Irish consumer sentiment suffered a ‘Boris bump’," said KBC Bank Ireland economist Austin Hughes. 

"Our sense is that the combination of a tougher line and no specific solutions espoused by Boris Johnson in the race to become leader of the Conservative party and Prime Minister of the UK was the key driver of the drop in Irish consumer sentiment in July."

Mr Hughes said the divergence in consumer outlook between the economies was interesting.

"In Ireland, there is the sense that Boris is going to be tough, yet he has no clear solution. In the UK, strong and decisive leadership is causing the bounce. 

"Irish consumers are also thinking back to the crisis and the significant hit to incomes that we saw here. In the UK, we must remember that a lot of people voted for Brexit and maybe they think this is a good thing."

There were also warnings about the domestic economy in the survey period which may have contributed to the downgrading in the outlook.

Austin Hughes said the consumer had been subject to some mixed messaging.

"We heard one warning that a recession was coming. Another warned that the economy was over-heating. When consumers hear all this mood music that things are going to get worse either because the economy is too hot or too cold, it causes a lot of confusion.

"We don't want consumers to be complacent about the outlook, but I think some of the messaging is not helpful. It's useful for consumers to know about the risks of recession and what to do about them, but general warnings don't seem to be helpful about the trajectory of the economy," he concluded.