Ratings agency Moody’s has said the record-high consumer confidence in Ireland is unlikely to translate into a material improvement in loan arrears because high unemployment and stagnant salaries will continue to weigh on individuals’ ability to repay their debts.

Irish consumer confidence has bounced back in line with pre-crisis levels, at 99.7 in July 2015. However, Moody’s analysis reveals that there is no meaningful relationship between Irish consumer confidence and loan repayments. The agency said the record consumer confidence “belies loan arrears forecasts”.

“Overall, consumer loan performance is unlikely to improve significantly, despite the fact that consumer confidence in the peripheral euro area is back to a pre-crisis record high,” Moody’s said.

The ratings agency said that in Ireland, GDP growth and improving unemployment from 2009 to 2011 did not lead to declines in mortgage arrears of 90 days.