ULSTER Bank has increased its' mortgage and deposit interest rates by between 0.25 and a 0.5 of a percentage point.

Following similar moves by the other main banks, Ulster Bank has raised its variable mortgage interest rate from 6.9 per cent to 7.15 per cent, with effect from close of business yesterday. Its special one year fixed rate, however, remains unchanged at 5.8 per cent.

The rate of interest charged on an overdraft is also going up, from 10.75 per cent to 11 per cent while its term loan rates for personal customers increase from 10.5 per cent to 11 per cent.

For business customers overdraft rates will rise by 0.45 of a percentage point to 9.95 per cent with term loan rates undergoing a similar increase to 10.7 per cent.

Savers will gain between a half and a quarter of one percent on their deposits, depending on the type of account.

Interest rates in Dublin traded slightly higher yesterday, with key one month money market rates at 5.75 per cent. But analysts believe these rates will begin to settle back to around 5.5 per cent shortly.

The pound also edged higher on the foreign exchange markets, trading at 104p against sterling. Economist expect the Irish currency will continue to breach the 104p levels but is unlikely to move further ahead in the short term.

The pound gained marginally on the dollar to close at $1.6225 and was a touch stronger against the deutschmark at DM2.3945.