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MORTGAGE HOLDERS IN Ireland can breathe easier for another month as the European Central Bank decides not to raise its key interest rates.
As expected, the ECB kept rates unchanged at 1.5 per cent following a meeting in Berlin today.
The policymakers have already increased the rates twice this year – both of which led to higher mortgage repayments for homeowners in Ireland.
Following his last meeting as the president of the ECB, Jean-Claude Trichet will hold a press conference on the Governing Council’s decision shortly.
Reuters reports that the central bank will hint at further increases later this year.
As Trichet hands the reins over to Italian central banker Mario Draghi next month, he will not want to leave the whole burden of bad news with him.
The ECB is also considering further liquidity measures, according to Reuters.
Trichet will likely announce bond buying programmes and 12-month lending operations at the press conference.
Earlier today, the Bank of England announced it will inject a further £75 billion into the economy by raising the value of its quantitative easing programme to £275 billion.
The central bank will print the extra cash to buy bonds and other assets over the next four months.
The last time the programme was added to was in 2009 but the policymakers today said that tensions in the world economy were threatening the UK’s recovery.
“In the light of that shift in the balance of risks, and in order to keep inflation on track to meet the target over the medium term, the committee judged that it was necessary to inject further monetary stimulus into the economy,” the policy committee said in a statement.
The committee also voted to maintain the key interest rate at its record low of 0.5 per cent.
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What do you mean relief? They were never going to go up-I would have thought people are disappoited they didnt go down.
Make no difference as the bank keep raising the rate anyway. Why the government keeps allowing this is unbelievable. I’m paying far more and it went up again last month, are they trying to make more people default?
That’s the gamble you take with variable rate mortgages though.
They’re not trying to make people default as that’s no more in their interests than it is in yours. But they’re losing money on probably every single tracker mortgage, and that’s why variable rate mortgages are being hit – to make up some of that shortfall.
Was it not explained to you that your variable rate could go up? Poor form from your bank or advisor if not.
It’s not much relief for homeowners at all when the likes of PTSB raise their interest rate every month regardless of ECB actions.
I despair!
The debt problem is the one that is of most concern, inflation is a secondary worry. If they do not get a handle on the debt the future of the Euro may be at steak, it already frankly is, as the massive contradictions in its setting up, rip across the continent.
Cut the interest rate, allow some stimulus or relief, promote growth and accept for a while that inflation is higher than liked, it means that the debt will deflate away some what at least.
This is not a normal economic paradigm.
Its a great relief, thank you so much!! We should be grateful to the Elitist Cun@ting Bankers!!
The ECB is giving a huge subsidy to mortgage holders already. If left to their own devices, Irish banks would have to pay 15% to borrow the money they lend on to mortgage holders. Instead the ECB (backed by Germany) is lending them money at under 2%.
I agree, the ECB should cut rates to save the euro but can understand why they don’t. The Germans have a deep-rooted fear of inflation after it led to World War 2 and it’s already well above the target. Gotta keep them Germans onside right now, they’re the only ones that can really save the euro.
I would not like to be the ECB at the moment, trying to fight inflation and the debt problem will not be easy
have your say