Apart from retail sales for January, we are also on Friday due to get new data from the Irish central bank on private-sector credit. Loans to households declined at a rate of 4.1% year-on-year in December, compared with an annual fall of 4.3% in November. Lending for house purchase continued to be the main category driving the change, declining at an annual rate of 3.0%.
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Lending for consumption and other purposes, which accounts for around 23% of total household lending, fell by 7.6% over the same period. Household loan repayments exceeded draw-downs by €139m during December, following net monthly decreases of €403m in November and €472m in October. Developments in the month reflected the decline in loans for house purchase, which fell by €167m. Consumption related loans increased by €40m in December.
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<b><i>The credit data remain the most disappointing as regards Ireland’s recovery story. Although there has been some improvement in recent months in terms of bank lending, progress remains slow. Advancing credit to the SME sector in particular is essential if the Irish economy is to fully recover.
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Meanwhile, we expect loans to households to be 4.0% lower in the year in January.
<p><h5>Alan McQuaid</h5>
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