The ECB is about to raise interest rates again; Rate may increase by 0.75%
Brussels: The European Central Bank (ECB) is preparing to raise interest rates amid concerns that Europe as a whole is heading for a recession. Rates may be raised this week. Interest rates are expected to rise by 0.75%, according to economists. This process is expected to continue until it reaches 2.25% in February.
The ECB’s refinancing rate has been raised to 1.25%. This is the largest increase in interest rates since 2011. The European Central Bank is expected to raise interest rates to around 3%. Some analysts believe it will be 3.25% by the middle of next year.
The rate hike will have a significant impact on lakhs of borrowers who have mortgages on their homes.Their repayments will skyrocket. This would cause a major crisis for the borrowers. The ECB rate hike will have an impact on 4,75,000 tracker and variable rate borrowers.
As part of its efforts to control inflation, the ECB raised interest rates for the third time this year. According to Bloomberg economists, the ECB is expected to keep raising interest rates as the economy weakens.
AIB raised interest rates in line with the ECB’s rate hike. The Bank of Ireland and Permanent TSB are also planning rate hikes. Fixed rate mortgage products under the AIB, EBS, and Haven brands saw a 0.5% increase.
Meanwhile, three of Europe’s leading economies have begun to show signs of a recession. In the third quarter, their GDPs fell. The economies of France and Spain are slowing. Germany’s economy is contracting as well. Sweden, which is experiencing a housing crisis, has also begun to show signs of a GDP decline.
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