Lending to the private sector slows in February

Private sector borrowing slowed slightly in February as residential mortgage lending remained relatively static last month, according to figures from the Central Bank.

After growing by €3.3 billion in January, private-sector credit growth declined by €95 million last month bringing the annual increase to 4.8 per cent in February, down from 6 per cent in January.

This brought total lending by credit institutions in Ireland to Irish residents to €395.6 billion in February.

A small rise in residential mortgage lending in January tapered off somewhat last month, recording a net increase of just €58 million, bringing the level of outstanding mortgage debt to €148.3 billion.

That brought the annual rate of mortgage lending growth to 4.9 per cent, compared with 5.4 per cent in January.

The Central Bank notes this contraction occurred despite lower interest rates and a decline in house prices of over 2 per cent in the first two months of the year.

With shopping in the post-Christmas sales over, new credit card spending on personal and business cards during February continued to decline, with the the annual increase dropping 3.3 per cent. Overall credit card indebtedness has been on a broadly downward trend since July.

This has taken place in the context of a slowdown in consumer spending - excluding car sales - which was 8.1 per cent lower year-on-year in January.

Outstanding indebtedness on credit cards, including balances that may be paid in full at the payment due date, stood at just over €3 billion, down €51 million on January.