On Friday, the bank of Ireland has raised its interest rates over home-loan, business and credit-card customers. The bank has blamed the falling European economy for its step.

It has been reported that during the global meltdown, all the banks fell flat to face the financial challenge. At that time, Bank of Ireland was the only one which didn’t became a subject of scrutiny. However, since the global crunch the bank is running in losses.

It has been reported that Bank of Ireland, like other lenders, required billions of euro in government aid and continues to rely on huge amounts of short term loans from the European Central Bank to keep its doors open.

However, yesterday, the bank has said that it will increase its standard variable rates by half a percentage point for home loan borrowers to 3.99%, and to 4.14% for customers of its ICS Building Society unit. Moreover, it will also be increasing the variable rates for buy-to-let residential borrowers, also by 0.5 percentage point.

Following the announcement by the bank of Ireland of increasing the interest rates, the lender have warned that they will increase the costs of its credit cards by 0.5%, personal loan rates by 0.25% and will also increase charges on its personal overdrafts by 0.5%.