Peter Ellis gets into this in his book The Druids. Most of what's written about human sacrifice and the Celtic peoples comes from propagandistic Roman sources. However, there are two reference to ritual human sacrifice in the Dindshenchas, which was recorded by a Christian scribe.

The first reference is to Saint Patrick, who condemned the "burning of the first born progeny." This is somewhat problematic because Patrick doesn't reference human sacrifice in his own Confessions, though he rails against pagan practices. Also, the concept of primogeniture (the importance of the firstborn child) was foreign to Celtic culture.

The second reference is to the worship of Cromm Cruach, to whom the Lord of Death, Tingernmas, offers sacrifices of "the firstlings of every issue, and the chief scions of every clan." Again, we have the problem of primogeniture, indicating that the story is anachronistic. Also, Ellis notes that "this story is, in fact, presented in the form that Tingernmas and his idol were a social aberration and were soon overthrown by the Druids."

There is no archaeological evidence of human sacrifice in the British Isles, and even Christian writers who loved to criticize the pagans had nothing to say about human sacrifice besides the references above. All in all, the evidence points to the idea of human sacrifice by Celts as being a myth made up by the Romans to reinforce the Celts' barbarism.