No pre-Budget rush to putextra cash into special savings account

INVESTORS did not use the run-up to the Budget to make big increases in their special savings incentive account (SSIAs).

Despite growing fears that Finance Minister Charlie McCreevy might put a cap on the scheme, only some €2 to €3m more than normal went into SSIAs in November, bringing the total invested to €1,402m at the end of November.

Deposits linked to SSIAs in November rose €126m and was only up marginally on the monthly increases since the scheme closed in April.

Credit figures issued by the Central Bank to the end of November disclosed a modest top-up above the normal by investors in November, it said.

It had been widely predicted that investors would use the window of opportunity prior to the Budget to invest as much as they could afford just in case the minister decided to call a halt to the scheme.

On the borrowing side of things, the Central Bank statistics show that strong mortgage demand drove up borrowing in November to an annual rate of 13.9% from 13.5% the previous month.

Figures released by the Central Bank yesterday show the annual growth in residential mortgages rose to 21.8% in November from 21.2% in October.

This is its fastest rate of increase since March and further evidence of the strong underlying demand for houses, despite the marked slowdown in the overall economy.

Excluding mortgages, the annual

adjusted rise in credit was up only marginally from 7.9% in October to 8.1%. Overall lending to Irish residents in November showed a rise of €1.1 billion, with most of that made up of money being made available as home loans.

In the period under review, borrowing by Irish residents rose to €141.6 billion, with most of the increase made up of €800m attributed to the demand for home loans during November.

According to the bank, the amount outstanding under residential mortgages rose by €796 million, broadly in line with the rise recorded in

October.

Other mortgages increased by over €200m, while overdrafts and term/revolving loans grew by €150m and €350m, respectively.

Those increases were offset by a fall of €460m in loans of up to one-year duration.

During the month, the amount of currency in circulation increased by €225m.

Reflecting the mood of the

pre-Christmas season, the amount of money on deposit in current accounts increased by €432 million, as consumers geared up for the festive season.