Mortgages driving private sector credit growth

Private sector credit growth strengthened in July as demand for residential mortgages remained strong, the Central Bank said today.

In it's monthly statistics the bank said annual growth in residential mortgages increased to 24.2 per cent in July, the highest rate since December 2000.

The annual adjusted rate of private-sector credit growth rose to 14.6 per cent for July, from 13.5 per cent in June, remaining below the rates of around 16 per cent recorded earlier in the year.

Annual growth in non-mortgage credit was also stronger in July, rising to 9.6 per cent from 8.2 per cent in June.

The bank said: "Market interest rates remained steady at a little over the ECB's minimum bid rate of 2 per cent in July, reflecting the view that monetary policy was on hold for a number of months."

Total lending by credit institutions in Ireland to non-government Irish residents rose by €2.3 billion to €150.2 billion in July.

Almost all of the increase was accounted for by domestic activity and denominated in euro, with residential mortgages accounting for more than half of the total. Lending to IFSC companies rose by €135 million.