A new index shows that consumer expenditure rose by 3.2% in February on an annual basis, after a 0.9% fall in January. 

Visa's Irish Consumer Spending Index, produced by IHS Markit, measures expenditure across all payment types - cash, cheques and electronic payments.

Visa said the expansion was the second in the past three months, and the biggest since October 2018. 

But it added that year-on-year comparisons will be flattered by the fact that 2020 is a leap year, which saw an extra trading day this February compared to 2019.

The food and drink sector posted the sharpest rise in expenditure, posting the fastest expansion since March 2018, with a rise of 8.6% year-on-year).

Strong growth of 8.2% was also recorded in the hotels, restaurants and bars sectors. 

Visa also reported solid increases in the household goods (+4.7%) and clothing and footwear (3.1%) sectors.

Philip Konopik, Ireland Country Manager at Visa, said the food and drink sector will continue to rise next month.

But he said Visa expects to see sharp falls in other categories due to the Covid-19 restrictions that are currently being put in place such as pubs closing ahead of St Patrick's day, typically one of their busiest trading periods during the year.