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ECB raises interest rate

The ECB raises the key interest rate to 4 percent

The European Central Bank (ECB) recently decided to raise the key interest rate by 0,25 points to 4,0 percent. This move marks the ECB's ongoing efforts to counter persistent inflation. This is the eighth consecutive hike in interest rates, marking the highest level since the global financial crisis in October 2008, when interest rates hit 4,25 percent.

The ECB has revised downwards its expectations for economic growth for this year, while expecting higher inflation in the euro zone than was the case three months earlier. It forecasts an inflation rate of 2024 percent​3,0​ for 1. Higher interest rates make borrowing more expensive, which can slow demand and lower inflation. According to an initial estimate by the statistics office Eurostat, consumer prices in the euro zone were 6,1 percent above the level of the previous year.

On the plus side, savers benefit from rising interest rates. Many banks are raising interest rates on savings, and negative interest rates are no more. For overnight deposits available nationwide, the average interest rate has exceeded the 1 percent mark for the first time in years.

However, borrowers face increasing costs as banks pass on to their customers the costs they pay for their central bank loans. Average interest rates on consumer loans have risen steadily since April 2022.

Also people who are her Account are affected by the increase in the key interest rate. According to an analysis by Stiftung Warentest, bank customers recently paid an average of 11,22 percent interest for overdrafts. Higher key interest rates make this already expensive form of account overdraft even more expensive.

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Comments to "ECB increases key interest rate to four percent" Comparison

  1. Jihad says:

    How will the ECB's increase in the key interest rate to four percent affect my mortgage interest rates?

    1. Customer Support - Advisor says:

      Hello Jihad,

      We are very pleased that you are interested in our ECB raising the key interest rate to four percent test & comparison, and we are grateful for your valuable comment. Thank you!

      The increase in the key interest rate to four percent by the European Central Bank (ECB) may affect your mortgage interest rates. A higher key interest rate can lead to banks also raising interest rates on mortgage loans. If you have a current mortgage, you should speak to your bank to find out exactly how this will affect your interest payments. However, it is important to note that the exact impact depends on various factors and that a rate increase may not directly result in a proportional increase in your mortgage interest rates.

      With warm thoughts from customer service to Marktredwitz.

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