Borrowing costs for small and mid-sized businesses in Ireland increased in the first three months of the year, despite the wider speculation in the economy that interest rates will fall.
Irish SMEs already pay some of the highest borrowing costs in Europe.
The latest Central Bank data on credit for small and medium enterprises (SMEs) indicates that firms remain extremely cautious about borrowing.
Despite Ireland having one of the fastest-growing economies in the EU, gross new lending to Irish-resident SMEs slowed to €1.1bn in the first quarter of 2019 from the previous quarter's €1.5bn flow.
Debt repayments exceeded new lending to all Irish SMEs by €397m in the period.
Nervousness ahead of Brexit, originally scheduled to happen on March 31 is likely to have been an issue, according to Investec Ireland chief economist Philip O'Sullivan.
"When set against the backdrop of heightened Brexit uncertainty and international trade spats, it is not a surprise to see that Irish SMEs adopted a defensive posture with regard to leverage in the opening months of 2019," he said.
Of the 15 segments of SMEs tracked, only three saw an increase in new lending activity.
Even so, the credit data suggests the economy is performing highly despite continuing to deleverage, he said.
Borrowing costs are rising, however.
The weighted average interest rates on outstanding SME loans increased slightly in the first quarter of this year to 3.51pc.
New lending rates are higher, and now stand at 4.14pc for new drawdowns with the highest costs in sectors including agriculture and transport/storage that are likely to be on the economic front lines in the event of a no-deal or crisis Brexit.
The rise in the cost of debt for businesses is in contrast to the declining cost of credit to lenders.
The ECB's indication that monetary policy is set to become even looser, with potential interest rate cuts on the way, has pushed down borrowing costs on capital markets.
Borrowing costs were already low for the banks.
Last year the main banks stopped using the State's Strategic Banking Corporation of Ireland (SBCI), which was set up to channel low-cost finance to SMEs, because the lenders were able to access cheap money in their own right.