(adds analyst comment)
By Gavin Jones
ROME, Jan 27 (Reuters) - Italian consumer morale rose unexpectedly in January after three consecutive falls as Italians took a brighter view of their personal finances and the country's economic situation, data showed on Tuesday.
The improved sentiment goes against a tide of grim economic news in recent months as think-tanks have slashed Italy's growth outlook and firms have announced lay-offs.
Research institute ISAE's seasonally adjusted consumer confidence index rose to 102.6, from 99.6, above all forecasts in a Reuters survey of 19 analysts which had pointed to a fall to 99.0.
The reading was the highest since September last year but still remains far below its long-term average of around 113.
"It is possible that consumers' views have been positively influenced by the reduction in price tensions," ISAE said, a reference to the recent sharp fall in inflation driven by reductions in fuel and food prices.
Analysts said the outlook for the euro zone's third largest economy remained extremely bleak.
"I think this data is a one-off and doesn't change the negative outlook for consumer confidence, with the labour market likely to turn down significantly in coming months," said Holger Schmieding of Bank of America.
"And the outlook for the overall economy doesn't change at all, with Italy mired in a deep recession."
Economic growth is forecast to fall by around 2 percent this year, the worst result since 1975, giving Italy two consecutive years of contracting gross domestic product for the first time since World War Two.
Unicredit MIB economist Marco Valli cautioned that the link between ISAE's consumer confidence data and Italians' spending behaviour was "very tenuous".
ISAE's survey showed confidence in the state of the economy rose to 74.9 from 68.5, while its sub-index on personal finances increased to 116.9 from 114.7.
The "current conditions" sub-index, incorporating sentiment on the economy and personal finances, rose to 110.8 from 107.3, while the future outlook rose to 91.1 from 88.5.