As people spend their way through this bank holiday weekend, they may find themselves in agreement with the European Central Bank (ECB) that inflation is getting out of control. That was the reason cited by the ECB on Thursday for putting through the fourth increase in lending rates in the space of eight months - with more to come.
The ECB takes the view that inflation in the euro zone - the countries that use the euro - should be running at below 2 per cent. At the moment the euro zone average is 2.5 per cent while the current rate in this State is even further out of line at 3.9 per cent.
The upward trend in European interest rates is mirrored elsewhere. The US Federal Reserve has put through no less than 17 rate increases. The Fed is equally concerned about inflation (4.2 per cent and rising) but it can take comfort from the fact that the US economy is performing strongly and rate increases will have only a limited effect. US interest rates stand at 5.25 per cent, justifying Mr Trichet's contention that the euro zone equivalents are still comparatively low. That being said, they have reached a five-year high and many people are sinking deeper into debt.
This credit spiral is of major concern, potentially laying the foundations for significant future problems. Reporting massive six-month profits of €1.2 billion earlier this week, Allied Irish Bank pointed out that while its Irish division saw deposits rise by 20 per cent, the figure for lending was up 33 per cent. In overall terms, the growth of private sector credit is running at 30 per cent. Within that, the increase in credit card debt - an extremely expensive form of borrowing - is running at 18 per cent. One can only assume that many of those relying so heavily on their cards are doing so because they are borrowed to the hilt in less expensive debt. This amounts to the financial equivalent of engaging in a highwire act.
The climb in interest rates through this year, allied to significant increases in energy prices, will put a squeeze on disposable incomes. The housing agency, Threshold, has warned that those at greatest risk are on modest incomes and have borrowed heavily - as they must - to have a home of their own.
The Irish property boom has produced many multi-millionaires. But the risk now is that it will give rise to a new breed of young and impoverished home-dwellers. Against this background, borrowers would do well to remember that the financial institutions that are feeding the current credit boom - and profiting so handsomely from it - may not be so accommodating should their fortunes change.