Mr. John McCarthy:

My own view would be that the recovery in confidence is mainly due to what is going on in the labour market. We now have a level of employment that is 7% above its low point. As a result of the creation of approximately 130,000 additional jobs the unemployment rate has come down. Households are in general more confident about where things are going. I think they are aware that the deficit is coming down and that progress is being made. The Deputy will see from the figures when eventually published that there has been a decline in the savings rate. This is due in part to the need for less precautionary saving. Confidence is crucial. The growth in confidence is supporting strong consumer spending. We estimate that consumer spending will increase by approximately 3.5% this year. More than 100,000 cars have been sold this year and retail sales are running at 6% or 7%.