Two new sets of data show that lending to Irish households has started to grow again, but the slowdown in consumer spending levels continues to take hold.
Latest Central Bank personal credit and deposit statistics show total lending to Irish households grew by 0.4% year on year in the first quarter of the year.
Lending for house purchases fell by 0.9% on a year-on-year basis, but there was a 10% annualised rise in borrowing for other purposes. The latest Central Bank figures also show a 2.7% annualised rise, for the first quarter, in total household deposit levels.
Meanwhile, latest data from Visa shows that Irish consumer spending continued to grow in May, but that the growth is steadily slowing.
“The rises in spending during the second quarter of the year so far have been among the weakest since the series began in September 2014, suggesting a slowdown in growth of Irish household expenditure. Recent expansions have been particularly weak in comparison to the strong increases seen during much of 2016,” Visa said in its latest Irish spending index.
The main source of growth in May was via online/e-commerce channels, with spending up 7% year on year. This was an improvement on April’s growth, but still ranked as the second-slowest rise for two years.
Face-to-face spending continued to fall, meanwhile, with expenditure down 2.5% year on year last month. Spending on the high street has now declined on an annual basis in eight successive months.
“The high street is being hit hardest as people search out bargains online in the face of stronger inflationary pressures,” said Andrew Harker, senior economist at IHS Markit.
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