Figures from the Central Bank show that the annual rate of lending growth in the economy continued to slow in June despite what the bank described as a sizeable increase in the month.

Residential mortgage borrowing rose by €1.6 billion in June, a slightly higher figure than in May, but the annual rate of growth continued to fall to 19%.

The Central Bank pointed to figures for the first six months of the year as evidence of the slowdown in mortgage lending, with a rise of €8.6 billion in the level of borrowing, 25% lower than in the same period in 2006.

Overall, private sector credit rose by €5.3 billion compared with May, with most of the growth coming in the non-mortgage sector.

The annual rate of credit growth dropped to 20.2%, while the rate for non-mortgage lending fell to a two-year low of 26.3%.