There may be no adult equivalent to the Teletubbies but at least two lucky motor cycle enthusiasts will wake to find a Harley Davidson in their Christmas stockings this year. Business is booming and retailers are expecting a bumper Christmas for the third year in a row as low inflation, low interest rates, tax cuts and rising employment ensure that consumers continue to have cash in their pockets and to spend it freely.

With money making little on deposit, people are looking for more seasonal returns and diamonds, furs and expensive wines are selling well. And Dublin's Harley Davidson shop says it has sold two bikes intended as Christmas presents. Prices for the famous motorbikes range from £8,700 to £23,000.

"What's selling wonderfully this Christmas are cashmere coats with fur trims," says Ms Caroline Barnardo, managing director of Dublin furriers Barnardo. "People don't simply want a classic. They want something a little different."

Barnardos, based at the bottom of Grafton Street, has supplied furs to the citizens of Dublin since 1812.

As well as the fur-trimmed cashmere coats which cost £800 to £2,000, mink is selling well, Ms Barnardo says. Her most popular item is a swing coat, finishing two to three inches above the knee and costing £2,000 to £4,000.

Just up the road, another veteran of the Dublin retail scene is also doing good business. Weir & Sons has been selling jewellery since 1869 and has seen quite a few Christmas trends over the years, according to managing director Mr David Andrews.

"Jewellery is selling particularly well this year. With gold below $300 an ounce it's the year to buy gold," Mr Andrews says. Watches are also proving popular, particularly expensive makes such as Gucci and Cartier.

At the very top end of the range, Mr Andrews has noticed a trend to buy diamond rings with a price tag of £15,000 plus.

Business has been boosted by large numbers of weekend visitors from Northern Ireland who have started coming south to take advantage of sterling's strong exchange rate against the Irish pound.

But while the signs are good, Weirs is not counting its chickens.

"We won't know what's going on until the last minute. Usually we do a month's turnover on Christmas eve," Mr Andrews says.

The more liquid pleasures are also in demand with both the corporate and private customer, says Mr Erik Robson, manager of Dublin wine merchants Mitchell & Son.

Mr Robson says purchasers have expanded their horizons and are not so much bound to the classical French regions as in the past. Bottles in the £8 to £12 region are doing very well while at the top end of the range, the company is selling crates of wine costing more than £400 a bottle.

Nor have the action brigade been idle in the search for gift ideas.

Flying school Aerial Ltd says there is a lot of interest in vouchers for its flying lessons. A £50 voucher sees you airborne for 40 minutes while £79 keeps you in the skies for an hour.

But it's not just the very top end of the market that is thriving.

Dublin's department stores say that in spite of increased retail competition, business is up on last year. Both Arnotts, which doubled the size of its store this year, and Clerys say the extended trading hours have been an advantage, allowing people to drop in when it suits them and taking some of the panic out of Christmas shopping.

Sports and leisure goods and cosmetics are doing well while electrical and computer goods remain popular presents.

Electrical retailer Dixons says items with digital technology are very popular this year especially cameras and camcorders which cost upward of £350. Personal computers are also selling well as are games and software.

"An across the board view is that retailing is likely to be up by 7 to 10 per cent this year," says Mr Declan Martin, economic director of the Dublin Chamber of Commerce. "By and large it's a fairly optimistic scenario."

"The spending power of 11,500 people alone is enough to push up the volume of retail sales by a healthy whack."

In addition, interest rates have remained low this year, people have benefited from the tax cuts announced in last year's budget as well as pay increases agreed under the terms of Partnership 2000.

The confidence created by the ongoing strength of the economy and rising employment have played their part while business in the capital has also received a boost from the strength of sterling against the Irish pound.

"Over the last two years, we have seen an influx of Northern shoppers while fewer Dublin shoppers are going to Belfast," Mr Martin says.

The strength of sterling is drawing Northerners southward while the arrival of major UK stores like Boots, Dixons and Argos has made Dublin at least as attractive as Belfast for shopping.

But the Christmas boom is not confined to the capital and retailers in both Cork and Galway also report a good season so far.

"From December 1st onward, things have been extremely good," says Mr Duncan Graham, general manager of Marks & Spencer's Merchants Quay outlet in Cork.

"The last two weekends were very big and Sunday trading was 25 per cent bigger on average than last year."

Mr Graham, who is also vice president of the Cork Business Association, says a combination of Park `n' Ride schemes to alleviate car parking difficulties, investment totalling £45 million in the city centre and the strength of the economy have contributed to the buoyant trade.

Retailers in Galway also say business has been good so far but are bracing themselves for the last-minute scramble this weekend.

"There is money around," says Ms Breda Glynn, general manager of Moons in Galway. "But the big boom is usually in the last six or seven days. We are expecting a big rush this weekend."