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LAST UPDATE | 27 Oct 2022
TRACKER MORTGAGE RATES are set to rise for the third time this year as the European Central Bank (ECB) announced a 0.75 percentage point interest rate hike.
Policymakers opted to raise the ECB’s rates by 75 basis points, just over a month on from the previous hike in early September.
The move is part of the ECB’s latest efforts to tame inflation, which has been driven in recent months by the surging price of food and energy in the wake of Russia’s war in Ukraine.
The ECB added that it would likely raise interest rates further in the future as part of plans to reduce overall inflation.
“The Governing Council took today’s decision, and expects to raise interest rates further, to ensure the timely return of inflation to its 2% medium-term inflation target,” said a spokesperson for the ECB.
With the latest increase, mortgage repayments for customers on tracker mortgages will increase, while it is not clear if banks will increase variable rate mortgages.
Bank of Ireland have confirmed that tracker mortgage rates for its customers will rise by 0.75%.
This change is set to take place from 16 November for most Bank of Ireland customers.
A spokesperson for Bank of Ireland said: “Customers don’t need to take any action right now. Bank of Ireland will write to all tracker mortgage customers confirming the new interest rate, the effective date, and their new repayment amount.”
The spokesperson added that decisions have not yet been made on other mortgage products, saying that rates are under ongoing review.
According to economist Victor Duggan, writing in The Journal this morning, every percentage point rise in interest rates will add €83 to the monthly repayment of every 100,000 borrowed on a tracker mortgage or variable rate mortgage, if the increases are fully passed on.
Inflation
In a statement announcing the interest rate hike, the ECB have said that inflation “remains far too high” and that it will remain above its medium-term targets for an extended period.
“In September, euro area inflation reached 9.9%. In recent months, soaring energy and food prices, supply bottlenecks and the post-pandemic recovery in demand have led to a broadening of price pressures and an increase in inflation,” the ECB said.
“The Governing Council’s monetary policy is aimed at reducing support for demand and guarding against the risk of a persistent upward shift in inflation expectations.”
The ECB added that it “stands ready” to adjust any instrument available to it to ensure that inflation stabilises at 2%.
ECB president Christine Lagarde had warned recently that inflation was “far too high” and more action was required to prevent price shocks from becoming “entrenched”.
During a press conference this afternoon, she defended the rate hikes saying that it was the “most appropriate” way to tackle inflation.
“The decision that we made today is the most appropriate in order to restore price stability, which, as you know well, is critically important for not just the stability of prices but also for the economy to actually prosper and recover,” she said.
On the potential to raise rates further in the future, Lagarde said that “there is still ground to cover”.
Additional reporting by AFP
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RIP Johnny, You and The Horslips are the reason my band, Cruachan, exist! A legend, you’ll be sorely missed.
@Keith Fay: and Cruachán is a fantastic band..easy knowing The Horslips were a guide.
Irish guitar God! Ar dheis Dé go raibh a anam!
Dearg Doom. Possibly the most recognisable Irish intro ever.
Ahh Jaysus that’s so sad, we all know the intro to Dearg Doom but his brilliant playing in Furniture The Snakes Farewell to the Emerald Isle and many others were so brilliantly haunting. He’s up there with Rory and Gary and sadly missed. RIP Johnny
One of the greatest. A very sad day. RIP Johnny
Sad day for Irish music , grew up with Horslips in the 70s , had the privelige of seeing them live in 77 , RIP Johnny .
Gutted, such a talent and a great loss. RIP Johnny
Sad to hear this. Saw Johnny and the boys many times growing up in Limerick, always a top show down at the Savoy. In that era he’d come out on his own for a solo, blast away on the Gibson and end it with an intro to Dearg Doom as the band kicked in and the crowd erupted. Remember him asking for a cigarette too once from stage and a virtual shower of them were thrown up for him. Different times, Horslips paved a path for so many that came after. Rock on Nightgown Boy.
Gutted. Ireland’s finest guitarist by a mile and easily among the best in the world. I’ll be waiting was an absolute gem…
Brilliant guitarist, will be sadly missed. I was so lucky to see them live a couple of times in the late seventies. Irish rock was so amazing. We had rory, lizzy, horslips on top of the world .
I am blessed I was able to bring my sons to see them in the 02 reunion tour.
Johnny and the boys rocked that night.
I loved Johnny’s playing. He was an integral part of what, for me, was Ireland’s best ever band. Back in the day, I travelled to see them on my Kawasaki whenever they played within a hundred miles of home. So many brilliant sounds, and absolutely loved the reunion gigs in 2009 (I think). Sincere sympathy to his family and fellow band members. May he rest in peace.
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