ECONOMISTS have played down the latest sharp rise in house prices, saying it will do little to fuel inflation.

Official figures issued yesterday show second hand house prices rose by 10.2 per cent in the first quarter of 1996 compared with the same quarter in 1995.

However, the rise was countered by news that the previously reported 15 per cent rise in the fourth quarter of 1995 has been revised down considerably.

The biggest increase in house prices was recorded in Dublin, with second hand houses estimated to have risen by 11.6 per cent year on year, while new houses rose in price by 9.2 per cent over the same period.

Commenting on the figures yesterday, a Riada economist, Dr Dan McLaughlin, said that the figures were unlikely to prompt any immediate concern from the Central Bank or a move to increase interest rates.

The Central Bank has publicly expressed its concern that strong growth in mortgage lending and spiralling house prices could fuel inflation.