FINANCIAL SERVICES: LOW INTEREST RATES ENCOURAGE MORTGAGE LENDING.

Mortgage interest rates continued their downward trend in the third quarter of 1998, and mortgage lending activity continued to grow, despite some cuts in mortgage tax deductability, according to the latest figures from the European Mortgage Federation. And the EMF has confirmed that gross lending rose by more than 50% in Denmark, Portugal and Greece in the first half of 1998 (compared to the first half of 1997), and France saw net lending increase by 98%. Meanwhile, European property and construction market activity showed "subdued recovery", says EMF.

Prospects for 1999. Pat O'Reilly, the new President of EMF since the beginning of 1999, expects mortgage lending in 1999 to be havily influenced by the advent of the Euro. "1999 is a challenging time: the Euro will undoubtedly bring new momentum to the financial services industry in Europe", he says. Mr O'Reilly, chief executive of EBS Building Society, says that in his native Ireland he sees the arrival of the Euro as "providing an opportunity for the introduction of new investment products...