ECB hints mortgage rates are set to climb
THE prospect of higher mortgage and consumer loan rates has moved closer, after the European Central Bank hinted that its key lending rate could start to rise by the end of next summer.
The ECB left its key lending rate at 0pc at its meeting in Latvia yesterday. But economists now expect a rate rise in September next year.
Although this is slightly later than some were expecting, it means the era of ultra-low rates is drawing to a close.
The ECB said it would keep its key interest rate at zero level “at least through the summer of 2019”. It also signalled it was taking its biggest step yet in dismantling crisis-era stimulus, a decade after the start of the eurozone’s economic downturn.
Economists said these developments meant rates could rise inside a year. Higher ECB rates will mean more expensive mortgages and higher loan rates, but savers may benefit from better returns.