Lack of credit ‘hurts recovery’

Household lending levels fell by nearly 4% on a year-on-year basis in July, fresh data from the Central Bank shows.

The figures show that loans for house purchase — 80% of total household loans — declined at an annual rate of 3.1% last month; while lending for consumption and other purposes fell by 6.5% year-on-year. The Central Bank also noted that household loan repayments — during the month — exceeded draw-downs by €437m. This followed a net monthly decrease of €104m in June. The July figure was mainly driven by a €255m decline in loans for house purchase.

The continued low level of lending to consumers could become a real barrier to full economic recovery, according to one commentator.