Financial markets now expect that ECB rates could rise by 1 percentage point this year, with the first hike by the end of the summer.<\/p>\n
It comes as new figures from the Central Bank of Ireland show that mortgage rates in this market remained static in January.<\/p>\n
ECB governing council member Peter Kazimir said the ECB is still in a \u201cgood place\u201d and there\u2019s no need to act at next week\u2019s meeting.<\/p>\n
But he said he is concerned that memories of the region\u2019s 2022 inflation shock have lowered the threshold for businesses to raise prices and consumers to demand higher pay.<\/p>\n
Upside risks clearly dominate the outlook, he said.<\/p>\n
\u201cFor the time being, we need to stay calm,\u201d he said, even though \u201cI\u2019d say a reaction by the ECB is potentially closer than many people think\u201d.<\/p>\n
\u201cI don\u2019t want to speculate about April or June. But we will be ready to act if needed,\u201d Kazimir said in an interview in Frankfurt with the Bloomberg news service.<\/p>\n
Analysts at the Dublin offices of specialist bank Investec said financial markets are now increasingly pricing a 0.25 of a percentage point rate hike by September.<\/p>\n
Markets expect another 0.70 of a percentage point rise by the end of the year following Mr Kazimir\u2019s comments.<\/p>\n
The ECB is expected to hold rates at its meeting next week and outline scenarios for growth and inflation should the conflict drag on.<\/p>\n
Meanwhile, Irish mortgage rates remained static in January, according to new data from the Central Bank of Ireland.<\/p>\n
The average mortgage rate for the month was 3.50pc. This is the same as for December, and down from 3.82pc a year ago.<\/p>\n
This leaves Irish mortgage rates at their lowest level since February 2023 and the seventh highest in the now 21-member Eurozone.<\/p>\n
The Eurozone average was 3.39pc.<\/p>\n
Daragh Cassidy, head of communications at mortgage broker Bonkers.ie, said Irish mortgage rates have been on a slow but steady downward trend for much of the past two years.<\/p>\n
\u201cLooking forward, the outlook for mortgage rates has become more mixed as a result of renewed conflict in the Middle East.<\/p>\n
\u201cBefore the conflict broke out, the general expectation was that the ECB would keep rates on hold for the rest of the year. In fact, there was even a small chance the ECB could cut rates by a quarter point if inflation stayed below the bank’s 2 per cent target.<\/p>\n
\u201cBut if the conflict drags on, and leads to a prolonged increase in energy prices and general inflation, we could be looking at a hike in rates. This could then feed through into higher mortgage rates for households.\u201d<\/p>\n
Mr Cassidy said anyone on a fixed rate is protected for now as their rate won\u2019t change until the end of the fixed term. But those on variable rates might be wise to assess their options.<\/p>\n
\u201cDuring the last energy crisis following Russia’s invasion of Ukraine, the ECB increased rates by 4.5 percentage points in a short space of time.<\/p>\n
Mr Cassidy said another hike of this scale is currently highly unlikely.<\/p>\n","protected":false},"excerpt":{"rendered":"Financial markets now expect that ECB rates could rise by 1 percentage point this year, with the first…\n","protected":false},"author":2,"featured_media":340533,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,3361,113,61,60,3362],"class_list":["post-340532","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-charlie-weston","tag-economy","tag-ie","tag-ireland","tag-money-experts"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/340532","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=340532"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/340532\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/340533"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=340532"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=340532"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=340532"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}