DUBLIN (Reuters) - Irish consumer sentiment rose to its highest in more than six years in October after jumping the previous month, with hard-hit taxpayers weathering another austerity budget as the country prepares to exit its international bailout.
The KBC Bank Ireland/ESRI Consumer Sentiment Index rose to 76.2 from 73.1 in September to reach its highest since June 2007, the year before a property bubble began to burst and a deep economic crisis took hold.
In another sign that Ireland's economic recovery may be gaining momentum, data earlier on Friday showed Irish manufacturing activity expanded at the fastest rate in 2-1/2 years last month.
"Coming after a sharp rise in September, these (sentiment) data point towards a clearly brighter mood among Irish consumers of late and hint that this may make them a little more willing to spend," KBC Bank Ireland chief economist Austin Hughes said.
"The healthier recent trend suggests some easing in the very painful experience of the past few years but the current level of the index still points towards a cautious and cash-strapped Irish consumer."
The October figure remains below the 85.2 historic average of the 17-year old survey, but well above a record low of 39.6 hit in July 2008 and a reading of 44.4 in December 2010 after Ireland signed up to its 85 billion euro (£72.06 billion) EU/IMF bailout.
Most of the survey interviews took place before Finance Minister Michael Noonan unveiled a seventh austerity budget in six years on October 15, but after he indicated that the level of cuts would be significantly lower than originally planned.
Hughes said there may be some budget impact on the November sentiment survey, but the lack of new taxes or headline benefit rate cuts may trigger a less adverse response.
(Reporting by Padraic Halpin; Editing by John Stonestreet)