The mood of Irish shoppers picked up this month, but mixed economic signals are holding them back from a spending spree, according to a survey released yesterday.

The IIB Bank/Economic and Social Research Institute (ESRI) consumer survey found that sentiment improved in June as optimism increased about job prospects in the State.

However, the survey found that concerns about global economic uncertainty continued to keep a fully-fledged spending boom at bay. The study, based on interviews with 1,100 people last month, measured consumer sentiment at 99.6 this month, up on the 97.4 it recorded in May.

IIB chief economist Austin Hughes said increased optimism about job prospects drove the improvement in consumers' outlook. He added that this was in contrast to the result in May, influenced by news of a number of high-profile job losses.

"As the early part of June saw fewer layoffs and official data showed very strong growth in early 2005, consumer concerns regarding unemployment ceased.

"The scale of the decline in May and rebound in June reflect specific events," he said.

However, the survey found that Europe's poor overall economic performance, the defeats suffered by the proposed EU constitution and news of a slowdown in the UK made consumers more cautious about spending.

"Consumers lack the sort of clear improvement in their own spending power that would allow them set aside worries about the global climate," Mr Hughes said.

"While they are optimistic about increasing borrowing to purchase property, update cars, book holidays and take advantage of summer sale bargains, these trends also rely heavily on the cheap price and the ready availability of credit.

"The tone of consumer sentiment and the evidence coming from retail sales data suggest the economy remains some distance from a fully-fledged spending boom," he added.

However, the study also found that confidence in future spending power was prompting people to borrow more.