THE prospect of another cut in Central Bank interest rates has increased following a fall in the rate of growth in borrowing by consumers. Private sector credit grew by 10.8 per cent in January compared with 11.2 per cent in December, according to the latest statistics published by the Central Bank.

The rate of growth in credit is one the key indicators taken into account by the Central Bank in framing interest rate policy. The slowdown in the rate will reassure the Central Bank that inflation is still growing slowly and that another cut in interests rates likely to follow a Bundesbank reduction would not be over inflationary.

However, the rate of growth in private sector credit is still well above the level the authorities would like to see, cautions Mr Alan McQuaid, economist with Bloxham Stockbrokers. He also said residential mortgage lending rose by 13.4 per cent, which would also be of concern to the Central Bank. European rate cut fever increased yesterday when Germany issued weak GDP figures and British analysts said credit easing by the Bank of England was regarded by the markets as a virtual certainty.