Consumer sentiment is at its highest point in nine years, according to the latest index from KBC Bank Ireland and the ESRI.

Their Consumer Sentiment Index rose to 101.1 in January, up more than ten points on December 2014.

This puts it at its highest point since February 2006, the bank said, with the sharp monthly rise registering as the fourth largest since the survey began 19 years ago.

Chief economist at KBC Bank Ireland, Austin Hughes, cautioned that such sharp rises do tend to take place at the start of the year, so some retraction could occur in the February index.

However he also said that the breadth and scale of the rise in sentiment indicated that there was a real improvement in how consumers were feeling in recent months.

The sharp drop in oil prices in recent times – which has fed through to lower fuel costs – is likely to have had an impact on this improvement, while consumers were also increasingly optimistic about their finances.

The January survey marked the first time in nine years that more consumers expected their personal finances to improve in the year ahead rather than worsen, the bank said.

Such a shift was an early – though by no means conclusive – indicator that the average consumer was beginning to feel the effects of the economic recovery, Mr Hughes said.