Demand for credit in Ireland remained strong in October, but the annual growth rate appears to be moderating as consumers and businesses feel the effects of recent interest rate rises, figures from the Central Bank show.
The bank's monthly statistics show private-sector credit increased by €6.3 billion, or 2.1 per cent, in October bringing the total outstanding amount to €309 billion.
This exceeded the September increase, to become the second largest month-on-month change in 2006.
New Central Bank figures show the rate of credit growth in Ireland is slowing
But despite this, the Central Bank said the overall credit demand reached its lowest level since July 2005, at 27.7 per cent in October, from 28.1 per cent in September.
This appears to be attributable to a reduction in the level of borrowing by Irish households for house purchase.
The rate remained steady in October, with the month-on-month change of €2 billion in residential mortgages. It was slightly above the September change and brought the total residential mortgage borrowing to €119 billion at end-October.
But the Central Bank noted the annual growth rate (adjusted for securitisations and reclassifications) continued to ease slightly, to 26.5 per cent in October, from 26.9 per cent in September.
Despite this, it said residential mortgages were increasing at a faster rate than the same month last year.
The bank said market interest rates firmed across all terms in October following the announcement on October 5th of an increase in official ECB interest rates.
The growth rate of non-mortgage credit exceeded the growth rate of private-sector credit and residential mortgages for the fifth month in a row.
