The European Central Bank cut its key interest rates – still a long way to go before the mortgage lender’s cat days – interest rates

As expected, the European Central Bank cut its key money market interest rates by 0.25 percentage points at its meeting on Thursday.

The interest rate for basic financial operations, i.e. the benchmark rate, is currently 4.25 per cent, the interest rate on ready-to-pay credit is 4.5 per cent and the interest rate on deposits is 3.75 per cent.

The central bank started raising interest rates from zero two years ago and stopped the hike in October last year.

At the start of the year, the ECB was expected to cut interest rates several times this year, but interest rate cuts in the spring began to look more uncertain. In the medium term, the ECB is targeting an inflation rate of two percent, based on which the bank determines future interest rate cuts.

Eurozone inflation stood at 2.6 percent in May, according to preliminary data from Statista. The reading rose slightly from April’s 2.4 percent.

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Home Loans As market interest rates generally react to the ECB’s moves, even a decrease would ease the situation.

At the start of the year, the 12-month Euribor also fell, when expectations of a faster fall in interest rates were still valid. Since then, the pace has slowed and interest rates were at 3.6-3.7 percent in the spring.

For example, Hypo estimates that the level of market interest rates will be three percent by the end of the year.

Also Read: Home borrowers wait for interest rates to drop even as ECB begins to hesitate to “buy good food”

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