ECB Raises Interest Rates

Jul 3, 2008

Yep yet another increase. The European Central Bank has raised its key lending rate by a quarter-point to 4.25%.

Banks and building societies are expected to pass the rate increase on to mortgage holders in the weeks ahead.

The increase was flagged by the President of the European Central Bank last month and comes after heightened concerns at the ECB about inflation in Europe.

The most recent estimate suggested that European inflation has reached 4% on average, which is the highest since the introduction of the Euro.

It is expected that mortgage repayments will rise by about €15 per month for every €100,000 borrowed over a 20-year period and €16 per month for a similar 30-year loan.

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