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Brexit impact on the Irish economy is likely to be "negative and material"

Written by Robert McHugh, on 14th Jun 2017. Posted in Economy

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Irish households remain relatively highly indebted and vulnerable to potential interest rate hikes despite growing employment supporting a fall in personal debt, the central bank said on Wednesday.

Ireland has had the fastest-growing economy in Europe for the past three years but its debt-to-disposable income ratio was still among the highest in Europe at 142% at the end of last year, following the financial crisis of a decade ago.

With almost half of all mortgage debt on products that track the European Central Bank's low interest rate and a further 41% on variable interest rates, the central bank said Irish borrowers were susceptible to any increases in ECB policy rates.

"While household debt has been declining, some households remain highly indebted, leaving them vulnerable to a rise in interest rates," the central bank said in its biannual macro-financial review.

"Debt is not distributed evenly across households. Those in the 30-44 age category have high debt-to-income ratios relative to other age cohorts and by international comparison." (Reuters)

Source: www.businessworld.ie

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