Irish Consumers began the year in surprisingly upbeat mood, according to the latest index from KBC bank and the ESRI.

Consumer sentiment is at its highest level in two years, apparently boosted by heavy discounts during the post-Christmas sales and a sense that the economic climate is slowly improving.

KBC bank chief economist Austin Hughes stressed, however, that most of those surveyed are still very cautious in their outlook.

“Consumers aren’t foolishly optimistic, but they do sense things are not as bad” he said.

“The rise in the Live Register this year is only about a sixth of that we saw in January 2009″.

“So while things aren’t brilliant, they’re probably a good deal less awful than they were in the past” he added.