Business Irish

Friday 19 September 2014

Boost for homeowners as majority of economists expect interest rate cut

Published 30/04/2013 | 14:59

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A MAJORITY of economists now expect a cut in eurozone interest rates in a move that would be a massive boost to some 375,000 people with tracker mortgages.

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Separate polls carried out by news agencies Bloomberg and Reuters found most European economists now expect rates to be cut when the European Central Bank meets on Thursday.

Pressure was piled on the ECB to deliver the rate cut today after new figures showed a fall in inflation in the eurozone to a three-year low and record unemployment.

Each 0.25pc reduction easing monthly repayments by €15 on every €100,000 of debt on a tracker mortgage.

Annual inflation rate in the 17 countries that use the euro dipped to 1.2pc in April.

This was the lowest since February 2010, and compares with 1.7pc a month earlier, according to the European Union’s statistics office in Luxembourg.

The rate has been below the ECB’s 2pc ceiling since February.

Economists at Danske Bank in Dublin said they expect ECB president Mario Draghi to cut rates to cut rates by 0.25pc to 0.5pc this week.

Frank Hansen of Danske said: “The market is already pricing in an EC refi rate cut and therefore there is a risk the ECB could disappoint.”

 

 

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