Bank lending has risen by some 31.1 per cent over the past 12 months, according to the latest figures from the Central Bank.

Private sector lending rose by 5.7 per cent in April from a month earlier. The annual growth rate increased to 31.1 per cent up from 25.2 per cent in March, its highest rate in recent years.

Mortgage lending also rose in April. It grew at an annual rate of 20.7 per cent in April from 20.1 per cent the month before, as the housing market continued to boom.

The figures are unlikely to please the Central Bank which has constantly pointed to the strength of growth in lending as cause for concern, although a large part of the rise was due to the Irish Permanent and Irish Life merger.

At the same time, the official external reserves were down €45 million from a revised €4,853 million at the end of March to €4,808.

According to Bloxham Stockbrokers economist Mr Alan McQuaid the borrowing figures are significantly above the euro zone average. The euro zone money supply growth slowed in April to 4.9 per cent from 5.2 per cent in March. The three-month moving average for year-on-year growth fell back to 5 per cent from 5.3 per cent the previous month.

He added that whatever happens to the Irish figures in the months ahead will have little bearing on ECB policy. Credit growth of 30 per cent would normally provoke an interest rate hike from the Central Bank but Mr McQuaid said he is expecting further "aggressive" interest rate cuts of up to half a percentage point over the rest of this year from the ECB.

Ironically, he said, this could boost confidence in euro zone growth prospects and help the euro - the normal Central Bank response to a weakening currency would be higher interest rates.

"July is the most likely month for a quarter of a percentage point reduction, which implies another before the end of the year," he said.