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Kenny accepts latest interest rate hike difficult - but won't stop it

TAOISEACH Enda Kenny says the Government accepts the latest mortgage interest rate rise by AIB will be "difficult and challenging" for homeowners.

But he refused to step to block the second hike by AIB in two months.

The State-owned bank announced last week it would be raising its interest rate by 0.5pc to 4pc - two days after the bank paid €1bn to senior unsecured bondholders.

The move affects the bank's 70,000 variable-rate customers, will see already-struggling homeowners coughing up an extra €1,222 a year for a standard €200,000 mortgage. Fianna Fail leader Micheal Martin said the rate increase will "bleed the ordinary householder across the country".

Mr Kenny said the decision was made by the AIB board.

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