CONSUMER confidence rose again last month to hit a seven-year high.

The increase is despite household finances being under continued pressure, especially with the advent of water charges.

KBC Bank and the Economic and Social Research Institute said the index of consumer sentiment jumped to 87.3 in April, from 83.1 in the previous month.

This is the highest level since January 2007.

But economist with KBC Bank Austin Hughes warned that people should not get carried away by the jump in confidence.

He said the index had risen modestly from very low levels, and many households were still under financial pressure.

Mr Hughes said confidence in the future was “weakened by uncertainty about the precise nature and scale of household water charges”.

“We would emphasise a continuing improvement in sentiment as pointing to an ongoing if modest recovery in the circumstances of the average Irish consumer,” he said.

Consumers have had very painful experiences of the past six or seven years.

“For this reason, we don’t think the fact that the index has reached its best levels since early 2007 should be read as suggesting that Irish consumers are extremely comfortable or exceptionally confident at present. Instead, the encouraging news is that consumers feel things are moving in a broadly positive direction.”