Loan drop fails to halt credit use

CREDIT demand increased in February despite clear indications that people have started to borrow less for housing.

Since October borrowing for non-mortgage purposes is accounting for the bulk of the monthly credit increase. This is being spurred on by solid economic growth expected to be more than 5% this year.

Analysts forecast the trend will continue and that Irish people are likely to continue to expand their debt rate at nearly four times the European level. Following a pause in January, year-on-year growth in private-sector credit (PSC) surged in February, when the underlying growth rate was up 26.9% from 26.6% in January.