Tracker and variable mortgage holders brace for hikes as ECB expected to raise rates today
The European Central Bank has raised interest rates by 0.25% to 2.5% in an effort to combat inflation driven by energy price surges. ECB President Christine Lagarde emphasized a data-dependent, meeting-by-meeting approach for future policy decisions.
Why it matters
This rate hike directly increases borrowing costs for European consumers, specifically impacting tracker mortgage holders in Ireland.
THE EUROPEAN CENTRAL Bank (ECB) has raised interest rates by a quarter of a percentage point to 2.5%.
The increase comes as the bank tries to keep the surge in energy prices from the Iran war from snowballing into widespread inflation without denting economic growth.
“The conflict in the Middle East continues to generate inflation pressures, and inflation is set to remain well above target for an extended period,” ECB president Christine Lagarde said.
Inflation among countries using the euro is 3.3%, which is well above the ECB’s target of 2%.
Speaking at a press conference following the announcement, Lagarde emphasised to reporters that the bank was not pre-determining what it would do in December and would instead follow a data dependent, meeting-by-meeting approach.
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