Irish consumer sentiment fell in August as the end of the summer sales, back to school commitments and the upcoming budget stifled the buying climate.

The KBC Bank Ireland/ESRI consumer sentiment index fell to 66.8 in August after a reading of 68.2 in July. The three-month moving average of the index increased from 66.7 to 68.5.

KBC chief economist Austin Hughes said overall consumer thinking had changed little during the month but that the looming October budget would have a bearing on people's spending in the coming months.

“While there may be some debate as to whether the scale of adjustment should be close to €2.1 billion or €3.1 billion, most consumers are likely to be unclear as to the precise implications either number may have for their family finances in the coming year,” he said.

“This means consumer confidence could be in for a bumpy few months.”

Three of the five areas measured while compiling the survey - future expectations for the economy, unemployment and household finances - were all unchanged in August.

The survey suggests people’s feelings when it comes to buying big ticket items has worsened but their view of their current household finances has improved modestly.

"The main source of this month's decrease was the buying climate for large durable goods, likely due to the end of the summer sales period," said Kevin Tomoney of the ESRI.

The report says Irish consumers remain cautious but are becoming increasingly less fearful than through most of the economic crisis period.