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03/07/2008
ECB Increases Lending Rates to 4.25%
Irish households are bracing themselves, after an interest rate increase announced by the European Central Bank.
The ECB held its monthly meeting today, and is aiming to tackle high inflation in the Eurozone by hiking lending rates to 4.25%.
Economists has correctly predicted a 0.25 point increase, which, for example, will present an additional €45 outgoing by those households with a €300,000 30 year mortgage.
Today's news has not been greeted favourably by struggling Irish mortgage holders, who are current paying the highest rates in seven year.
European politicians have also raised concerns about increasing the current lending rate, which they say could have ramifications for contrasting economies in Germany, where there is a slight weakening, and Ireland, where the nation is nearing a recession.
Politicians have expressed a desire to restore consumer confidence, and called for measures that encourage economic growth.
However, President of the European Central Bank Jean-Claude Trichet said the best way to ensure growth is with a solid foundation built on, what he calls, "anchored" inflation expectations.
Figures released earlier this week showed that manufacturing in the eurozone contracted for the first time in three years, last month.
Discussing the purchasing manager's index, UBS economist Sunil Kapadia said: "The euro area industrial sector, particularly in Spain and Italy, is clearly reeling from the combination of high commodity prices, a strong exchange rate and slowing demand growth."
(PR)
The ECB held its monthly meeting today, and is aiming to tackle high inflation in the Eurozone by hiking lending rates to 4.25%.
Economists has correctly predicted a 0.25 point increase, which, for example, will present an additional €45 outgoing by those households with a €300,000 30 year mortgage.
Today's news has not been greeted favourably by struggling Irish mortgage holders, who are current paying the highest rates in seven year.
European politicians have also raised concerns about increasing the current lending rate, which they say could have ramifications for contrasting economies in Germany, where there is a slight weakening, and Ireland, where the nation is nearing a recession.
Politicians have expressed a desire to restore consumer confidence, and called for measures that encourage economic growth.
However, President of the European Central Bank Jean-Claude Trichet said the best way to ensure growth is with a solid foundation built on, what he calls, "anchored" inflation expectations.
Figures released earlier this week showed that manufacturing in the eurozone contracted for the first time in three years, last month.
Discussing the purchasing manager's index, UBS economist Sunil Kapadia said: "The euro area industrial sector, particularly in Spain and Italy, is clearly reeling from the combination of high commodity prices, a strong exchange rate and slowing demand growth."
(PR)
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Ireland WeatherThis Evening and Tonight:Showers, scattered in the evening, will clear by midnight leaving the night dry with clear spells. Perhaps a touch of ground frost. Cloud will spread east towards morning. Minimum temperature 2 °C.
