Level of lending falls another €2.3bn

THE overall level of lending fell by another €2.3 billion in October, on a monthly basis, following on from the €4.4bn fall seen in September and a €1.5bn decline in August, according to latest public sector credit figures from the Central Bank.

The continued fall was led by a further drop in residential mortgage lending, which was down by €162 million in October – the seventh consecutive month in which mortgage lending has fallen.

“All in all, it is hard to see demand for credit picking up until consumers feel comfortable that unemployment has peaked and employers are hiring again. However, it’s a Catch-22 situation, as the availability of credit will be critical if labour market conditions are to improve. In the meantime, the year-on-year rates of change in demand for overall private-sector credit and residential mortgages are likely to turn more negative,” commented Alan McQuaid, senior economist at Bloxham Stockbrokers.