A new report shows that fears about job losses and higher interest rates dragged consumer sentiment to its lowest level in more than three years in March.

The consumer sentiment index, compiled by IIB Bank and the Economic and Research Social Institute, tries to measure how optimistic people are about the economic outlook.

Last month, it recorded 78.5 - the lowest figure since December 2003.

The main reason for the gloomier mood is concern about the labour market following recent announcements of job losses and plant closures at companies such as Motorola and Procter & Gamble.

IIB economist Austin Hughes said the 'feelgood' factor after December's Budget appeared to have faded, mainly because consumers now fear they will feel the pinch from another rise in interest rates and the recent rebound in oil prices.