Top banker warns mortgage growth will damage economy

One of Europe's top bankers has warned that Ireland's economy could be in danger of over-heating.

Chief Economist at the European Central Bank, Otmar Issing has said mortgage growth rates pose a threat to Ireland's economy.

Mr Issing said policy vigilance by the Irish Government is required in order to ensure that the increasing number of mortgage loans does not damage the economy.

He has warned the Government they cannot be complacent and says it is possible for them to prevent the problem, if they tackle the issue immediately.

Mr Issing's comments came in the wake of yesterday’s CSO announced that inflation has hit a three year high of three and a half percent.

Last week the ECB said it was worried about an 11% rate of house price inflation in Ireland.

It also said it believed current rates of house construction are too high.