Lending to Irish households and companies continued to fall in the year to October, the Central Bank said, but deposits at Irish institutions rose in the same period.

The figures showed loans to households fell by 4.2 per cent in the year to October, as home loans continued to decline. Lending for consumption and other purposes, which accounts for around 22 per cent of household lending, was also down, falling by 9.4 per cent in the same period.

Non-financial corporations saw their lending fall by 4.7 per cent in October, picking up pace from the 4.5 per cent decline recorded in September. The decline was particularly felt in the medium term loan sector, which was down 13 per cent.

Private-sector deposits were 7.6 per cent higher in the year to the end of October, as insurance corporations, pension funds and other financial intermediaries saw an increase of 26.4 per cent in their combined deposit holdings. Household deposits, meanwhile, were down 0.9 per cent.

“The credit data remain the most disappointing as regards Ireland’s recovery story,” Merrion Stockbrokers’ Alan McQuaid said. “These latest figures show that there is still little real progress being made in terms of advancing loans to households or indeed the SME sector. As a result, this will severely hamper the overall recovery prospects for the housing market and the Irish economy as a whole, and keep the unemployment rate higher than it would otherwise be. Unless this situation is addressed, the economy will continue to grow well below potential for the foreseeable future.”