British mortgage bank Northern Rock, which entered the Irish market last November, has passed on the full quarter percentage point ECB rate increase to demand account savers. Its move is the first by an institution in the Irish market following the announcement earlier this week by the European Central Bank of a rise in its main refinancing or "repo" rate. The new rate for Northern Rock's direct saver account and direct saver business account will be 5.75 per cent gross per annum from October 27th.

In November, Northern Rock made an aggressive entry into the Republic's savings market. At the time, it was offering a gross rate of interest of 4 per cent on funds of between £1,000 (€1,270) and £2 million. Irish savers have lodged £125 million with the bank so far.