Consumers are still spending, borrowing and taking out mortgages despite the economic slowdown, according to the latest data. But they have begun to cut back slightly on eating out and going to pubs, according to the figures released by the Central Statistics Office yesterday.

Retail sales, mortgage lending and credit growth remained buoyant over the beginning of the summer as consumers continued to spend on a wide range of goods with some exceptions including bars, food and tobacco.

Retail sales rose approximately 4.2 per cent in the year to June.

But if cars are excluded the rate of increase was 12.2 per cent, according to the latest data from the Central Statistics Office. The volume of retail sales, that is excluding price effects, increased by 1.1 per cent in June but by some 8.2 per cent if motor trades are excluded.

This is a similar rate of increase to the same time last year, according to NCB chief economist Mr Dermot O'Brien.

"Sales are holding up very well and the fall in car sales is natural after the huge jump last year following the introduction of the 00-reg."

He added that people are not influenced by the job loss headlines. "There were 42,000 new full-time in the year to the end of May.

It is simply that the areas where these new jobs are being created does not get the same publicity as the high tech layoffs."

He added that the continued spending by consumers shows that people react less to headlines than to how they feel about their own position. "Most people clearly do not believe their own positions are under threat," he added.

And according to Central Bank data, credit growth was unchanged in July from June at 18.9 per cent as people continued to borrow to fund their purchases.

At the same time the rate of growth in mortgage lending fell back slightly to 20.1 per cent in July, although that is its lowest level in three years.

This picture of a slightly slowing rate of mortgage growth fits with the picture of decelerating house inflation where houses are also taking longer to sell, according to Mr O'Brien.

But he added that the value of mortgage lending is still considerably higher than even last year.

At the same time the amount of money in circulation increased by 17 per cent on average over the first seven months of the year.

Consumers spent their share on a wide variety of goods.

The largest increase in the volume of sales was electrical goods which were up 9.7 per cent in the three months from March to May, the latest month that a detailed breakdown is available for. Hardware was also up significantly on this basis at 9.3 per cent. But food, drink and tobacco was down 2.3 per cent, while spending in bars was down 1.4 per cent. Other areas which showed a drop included footwear and leather and furniture and lighting which were down 1.4 per cent and 2.7 per cent respectively.

On an annual basis, spending on food, beverages and tobacco is down 2.5 per cent while spending on bars is only up 3.2 per cent.

Books, newspapers and stationary also did badly over the year with spending only up 2.2 per cent.