Business World

Tuesday 28 March 2017

Trichet signals imminent rise in ECB interest rate

Charlie Weston

Charlie Weston

A RISE in European Central Bank rates looks certain to be announced on Thursday week.

ECB president Jean-Claude Trichet said the bank was in "strong vigilance mode", a phrase he uses to signal a hike.

He was speaking yesterday in Amsterdam as figures showed German inflation was 2.3pc in June, well above where the ECB would like to see it.

A rise of more than 0.25pc is unlikely -- and this rate would add €15 a month to a €100,000 mortgage.

More than half of Irish mortgage holders either have a tracker or a variable rate mortgage, which means they will be hit when ECB rates go up again.

Rates rose in April, hitting 600,000 mortgage holders.

Meanwhile, new Central Bank show that trackers account for 53.4pc of outstanding home loans, totalling €53bn.

Trackers move in line with rates set by the ECB, and have been unprofitable for banks.

Irish Independent

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