Banks must be cautious on lending

THERE is good and bad news for Ireland in the European Central Bank’s slashing of its principal interest rate to 2% in the 12-nation eurozone.

On the plus side, mortgage holders and exporters stand to gain from the cut which brings the Irish rate to its lowest level since 1948.

Conversely, however, it will have an adverse impact on home buyers, forcing them to borrow more to keep pace with house costs in a property market where prices have literally gone through the roof.