Fearing an upturn in euro zone inflation and noting a resurgent German economy, the European Central Bank is expected to increase interest rates again in June - possibly by one half of one per cent.
If it does, it will be interesting to note whether some traces of caution in borrower behaviour reveal themselves in the credit statistics for subsequent months. So far and in spite of a rate increase in March, no caution is evident. Last Friday's credit statistics for March show this State's mountain of private sector debt continues to grow. An extra €3.5 billion in lending has pushed total debt stock to a level of €271 billion, up 29 per cent from a year previously.
Residential mortgage lending has resumed its dominance of lending growth in recent months, rising €2.1 billion in March and this is partly explained by demographic factors and a related need for housing.
Accelerating house price growth on top of what a growing number of analysts see as an overpriced housing market must make one worry if more recent mortgage lending is solidly backed by real estate value. Non-mortgage debt and credit card debt are also growing robustly begging the question, for what purposes do we need to expand our non-mortgage debt stock by over 28 per cent?
How vulnerable do these trends make the economy? In its financial stability report of last year, the Central Bank allayed fears as regards any threat to the economy's financial stability posed by borrowing growth up to last autumn. Developments in lending since then may give cause for the positive conclusions of that report to be revisited, but judgment and action must wait until the publication of the next report.
But judgment is needed now - and action soon after - in relation to other consequences of the borrowing spree. Accelerated growth in borrowing is once again being dominated by the rise in residential mortgage lending. This, in turn, is closely correlated with an acceleration in house price inflation that will put the goal of home ownership beyond thousands more young people. In failing to systematically address this, the main political parties are taking the risk that much of an entire generation will be abandoned by the political process.
Neither has any party properly addressed the increasing dependence of the Government on tax revenues that depend on the housing market as well as on consumption activity related to borrowing. The call made by the National Competitiveness Council to examine how the tax base might be broadened in the long-term national interest has gone entirely unanswered.
Rising interest rates later in the year will hopefully slow the pace of borrowing down. As it does so the Exchequer returns may begin to lose some of their recent lustre and thereby reveal more accurately the underlying state of the economy that drives them. Perhaps then our political parties will finally feel obliged to develop policies that have more to do with the national interest, and less to do with electoral calculus.