Irish private sector credit growth fell to a fresh three-year low in April as higher interest rates pushed annual mortgage lending growth to its weakest since August 2002, the Central Bank said.
The bank, which had warned of risks to the economy from soaring lending, said today the adjusted annual credit growth rate was 22.2 per cent, compared with 23.2 per cent in March.
The bank said there had been a "notable slowdown" in lending to the construction and real estate sector in the first quarter of 2007 while annual growth in outstanding credit card debt dropped to 17.1 per cent in April from 19.6 per cent in March.
The annual growth rate in residential mortgages fell to 21 per cent in April from 22 per cent in March. "Interest rates are at their highest level since September 2001 and monthly house price inflation has virtually stalled since November 2006," the bank said.
"The effects of rising interest rates on affordability can be seen in the April change in residential mortgages."
It said the month-on-month increase in mortgage lending was €1.2 billion, which was the smallest monthly rise in over two years and brought the total amount outstanding to €128.7 billion.
Total outstanding lending to Irish residents by credit institutions in Ireland increased by €3.6 billion, or 1.1 per cent, in April, to €331.8 billion. Irish credit institutions accounted for €221.5 billion of the euro area's broad money supply in April, a monthly rise of 2.1 per cent or €4.6 billion.
The bank said there was also a sharp drop in the outstanding indebtedness consumers owed on credit cards, with the rate of increase in this type of debt falling from 19.6 per cent in April 2006 to 17.1 per cent in April 2007.