Consumer confidence rallied marginally last month with retail sales up 2.4 per cent in value according to the Central Statistics Office.

However, year-on-year improvement was relatively sluggish at 0.1 per cent.

This suggests the public remains cautious about the economic outlook despite predictions of a return to growth, said analysts.

On a three-month basis, sales rose 1.1 per cent by volume to the end of September compared to the three months to end of June.

The sharpest increase was in electrical goods, climbing 8.1 per cent in the three months to August - the timespan for which more complete data is available. The biggest decline was in books, newspapers and stationary at 1.1 per cent.

Car sales were sluggish, showing a 1.6 per cent rise.

Sales by value rose 3 per cent in the month to September and by 2.3 per cent year on year.

However, if motor sales are excluded, the monthly and yearly increases were 2.5 per cent and 3.6 per cent respectively.

Analysts said the figures indicated a slow improvement in consumer sentiment, which would probably rally further in the pre-Christmas months.

However, the heavy spending of the boom years is unlikely to return in the near future, they said.

Demand for cars in particular remained flat, which is no surprise given the high level of new motor sales over the previous five years, said Mr Jim Power, chief economist at Friends First.

Given the listless state of the economy, it is unlikely consumers will resume such "big ticket" purchases in the near future, he said.

But the fact that consumer spending was increasing at all was a positive sign.

He said: "The Irish consumer has displayed strong fighting qualities over the past couple of years in a difficult environment where there has been lots of negative news flow."

Slow food sales during August - perhaps due to hotter than average weather - and back to schools purchases in September may have skewed the readings slightly, said Mr Austin Hughes, chief economist with IIB Bank.