ECB Keeps Interest Rates At Record Low Of 1%

Classified as: Interest Rates, News

It was decided yesterday by the European Central Bank (ECB) to keep the interest rates at a record low of 1%. This will also mean that the homeowners on tracker mortgages will not be able to see any increase in the interest rates at least until the middle of next year. However, others may get to see an increase a little sooner.

low interest rate

Kevin McNerney, the director of the Mortgage Finance Company, said that the next rate hike may not be seen until the end of next year. But it is possible that individual banks may push ahead with their own increases in rates after the NAMA bill is through.

Jean-Claude Trichet, the governor of ECB said that there will be a bumpy road ahead and only a slow and gradual exit will be possible from extraordinary measures.

He also added by saying that the Governing Council will ensure that the extraordinary liquidity measures taken are phased out gradually and that the liquidity is handled appropriately to oppose any threat to price stability.

Frank Conway, the director of the Irish Mortgage Corporation, said that it seems that the ECB will not do anything with interest rates before mid-2010.

Mr Conway also warned homeowners that on standard variable rates, they could see their mortgage costs increase if banks decide to hike rates.

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