The European Central Bank raises interest rates again…effective from the second of next month
Brussels: The European Central Bank raises interest rates again. The ECB has raised interest rates for the ninth time since last July. The interest rate was raised by 0.25% on June 15 as part of measures to combat inflation and related issues.
With the current move, the ECB’s base deposit rate has been increased to 4%. With this increase, interest rates have reached their highest level since May 2001.
The ECB clarified that the Governing Council decided to raise interest rates in order to return inflation to the medium-term target of 2%. The decision to raise the three main interest rates by 25 basis points is explained in the bank statement.
It is pointed out that, despite the ECB’s efforts to reduce inflation to 2%, the level of inflation remains high.
The refinancing, nominal loan, and deposit interest rates will be raised to 4.25%, 4.50%, and 3.75%, respectively. The bank informed that the increase will be effective from the second of next month.
The ECB statement makes it clear that 20 Eurozone countries were already in recession at the start of the year. It has not changed for two quarters in a row. Inflation is also on the rise. In the eurozone, inflation was 5.5% in June, down from double-digit rates last year but still short of the ECB’s 2% target.
Trevor Grant, chairperson of the Association of Irish Mortgage Advisers, stated that rising interest rates would have a significant impact on those with tracker mortgages, with mortgage payments increasing by up to €25.
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