Lending from banks and building societies accelerated again in March, according to the latest figures from the Central Bank. They show that overall private sector lending to Irish residents rose by 4.7 per cent in March from a month earlier, an increase of €3,348 million.

Total credit outstanding at the end of the month was €74,949, 25.1 per cent up on the same month in 1998, compared to a 23.5 per cent annual rate of increase in February.

The figures indicate that borrowing is rising in a number of areas. There was a sharp increase in term and revolving loans and short-term loans. Meanwhile, the mortgage market remains strong and residential mortgage lending was up 20.1 per cent on the same month last year, compared to an annual increase of 19.1 per cent the previous month.

Lending is expected to remain buoyant in the months ahead. Commenting on yesterday's figures, Mr Alan McQuaid of Bloxham stockbrokers said that "with the European interest rate outlook over the next year or so looking fairly benign, it is hard to see any great fall-off in demand for funds over the short-term". Bloxham is expecting euro interest rates to fall even further, with the key rate set to fall a further 0.5 of a percentage point before the end of the year.