AMID the general air of boom and bloom, the upset over BSE appears as an unwelcome blemish on the face of the economy. Half year trading statements this week from Ulster Bank and ACC Bank dwell on possible adverse ramifications for banking if the widening BSE boil is not lanced.

The unresolved issue raises the spectre of increasing bad debts and a disinclination by farmers to borrow in an industry fraught with uncertainty. Over at Ulster Bank, where interim pre-tax profits rose 16 per cent to £66 million sterling, management believes growth for the remainder of the year could be affected if the fall out from BSE develops. Lending rose £237 million, a 6 per cent increase and income expanded 12 per cent to £171 million, mainly through general lending and treasure business.

At ACC Bank, where 30 per cent of its loans goes to financing agriculture, the decision to step up the provision of mortgage finance helped interim pre-tax profits move ahead 17 per cent to £6.7 million. Again the strength of retail banking was the main contributor to the improved results.