ECB hints mort­gage rates are set to climb

Irish Independent - - News - Char­lie We­ston

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.

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