As expected, the ECB increased their deposit interest rate this week to 4% . The increase, up from 3.75% will take effect from September 20th 2023
The increase in the ECB’s interest rates to their highest level in more than 22 years will heap more pressure on tens of thousands of borrowers. The chances of a similar rate rise next month are lower .
The ECB’s main refinancing rate was increased to 4.5%. This is the rate that is typically used to set tracker mortgages.
In the UK the Bank of England raised their interest rate to 5.25% in August. The discrepancy in UK and EU interest rates can affect the strength of the Pound against the Euro. See more about the latest Exchange Rates here.
Mortgages – After another 0.25% increase, repayments on tracker mortgages will increase by about €13 a month for every €100,000 borrowed.