Consumer sentiment hit a four-year high last month driven by indications of buoyant spending in post-Christmas sales.

The IIB/ESRI index hit 106.8, up from 103.8 in December, with one in every two consumers indicating that now was a good time to purchase "big ticket" items - partly due to substantial price discounting on the back of a strong euro and a reduction worldwide in the price of electrical goods.

"The sharp improvement in consumers' perceptions of the current environment reflects the view that January was a good time to purchase major items," said ESRI economist Mr David Duffy.

"Historically, this component has improved every January, reflecting at least in part the January sales, followed by a more subdued figure in February."

The three-month moving average, which smooths out short-term volatility, rose to 101.1 in January, up from 98.7 in December and 80.8 in January 2004.

The one black spot was the employment outlook, which was attributed to a spate of high-profile redundancy announcements in the past few weeks.

The deterioration in the jobs outlook follows a sharp rise in confidence in this area in December but IIB believes the decline may be a temporary blip.

"While the trend in consumer sentiment is clearly improving, the downgrading of the employment outlook suggests there is still a sensitivity to bad economic news," said IIB chief economist Mr Austin Hughes.

The survey was conducted with 1,200 people in the first two weeks of the month.