Consumers showed further appetite for borrowing in December, with Christmas shopping seen as the main driver behind the latest climb in demand for credit.

New figures from the Central Bank show that borrowing in areas other than mortgages grew by 24.2 per cent in December, year-on-year.

This came as homeowners borrowed more in mortgages in one month than ever before.

The Central Bank said lenders had advanced €1.6 billion in residential mortgages in December, lifting total mortgage lending to €16.4 billion.

This translated into annual underlying growth in residential mortgage credit of 26.5 per cent, down slightly from the 27.1 per cent increase posted in November.

The Central Bank said overall private sector credit had grown by €37 billion, or 26.5 per cent, over 2004 as a whole. This compares to annual growth of 17.9 per cent in the previous year.

Consumers accounted for 55 per cent of the annual growth in overall credit. The Bank said the main driver behind growth in lending over the last few months of 2004 was non-mortgage credit,

Growth in this type of borrowing, which includes term loans and overdrafts, "was possibly buoyed by increased spending during the Christmas season", the Bank suggested.

Bloxham chief economist Mr Alan McQuaid agreed with this analysis, noting that demand for credit was unlikely to slow in the near future. He acknowledged that this could be the root of new concerns for the Central Bank, which has long been worrying about Irish consumers' ability to shoulder huge volumes of debt.

"From the Central Bank's point of view, there is unlikely to be much comfort on the credit demand front until interest rates start to rise, which still looks some months off," Mr McQuaid said. He is expecting growth of up to 30 per cent in both private-sector credit and residential mortgage demand "for the foreseeable future".

A breakdown of the Central Bank figures shows that term loans increased by €2.9 billion in December. Repurchase agreements climbed by €606 million, while overdrafts fell by €278 million.

On the savings side, deposits with a maturity of up to two years were ahead by €1.8 billion over the month.

Deposits with a term of less than three months climbed by €430 million, while demand deposits fell by €792 million.

At the same time, funds in Special Savings Incentive Accounts (SSIAs) increased by €153 million to €4.8 billion.