DUBLIN (Reuters) - Irish consumer sentiment hit a new seven year high in September as the economy continued its sharp recovery and the government promised its first budget with no major new austerity measures in six years.
The KBC Bank Ireland/ESRI Consumer Sentiment Index climbed to 92.8 from 87.1 in August, its highest level since January 2007 just before Ireland's economy collapsed under the weight of a massive property bubble.
The government last month more than doubled its 2014 economic growth forecast to 4.5 percent and confirmed that earlier plans for 2 billion euros (1.57 billion pounds) of tax hikes and spending cuts planned would no longer be needed. "The jump in Irish consumer sentiment ... seems to reflect a range of good news on the Irish economy and, critically, growing expectations of a notably easier budget," KBC Ireland chief economist Austin Hughes said.
"Consumers still see pressures on their spending power in the coming year but there is also a clear sense that these pressures should begin to ease," Hughes said.
The two main sub-indexes both grew strongly, with current economic conditions increasing to 103.3 from 98.3 and consumer expectations hitting in 85.7 in September from 79.6 in August.
The consumer sentiment index also hit a seven-year highs in April and July.
Ireland is unveil its 2015 budget on Oct. 14.
(Reporting by Conor Humphries; Editing by Toby Chopra)