DAVY VIEW

Central Bank data show that Ireland’s household debt fell to €137.5bn in Q3 2018, or 120% of disposable income. The ratio is now below the UK (124%) for the first time but is still the fifth-highest across the EU. We expect nominal bank lending to stabilise in 2019; however, with disposable incomes growing by 5%, helped by jobs and wage growth, the process of deleveraging will continue.