The European Central Bank raised interest rates by 0.25

The European Central Bank raised interest rates by 0.25 percent from the current rate. The prime interest rate is now 3.75 percent. The announcement was made on May 4.

With this, house prices also rose, and those who are planning to buy a house in Europe are also in the dark. Accordingly, the interest rate on the main refinancing operations and the interest rate on the nominal lending facility and deposit facility will be 3.75%, 4.00% and 3.25% respectively with effect from 10 May 2023.

It said it would stop reinvesting money from maturing debt in a 3.2 trillion euro asset purchase program from July. The central bank for the 20 countries that share the euro has been raising rates since last July. But further action is still taking place given rising wage and price pressures. The increase comes days after euro zone banking data showed the biggest drop in loan demand in a decade.

Key ECB interest rates

The Governing Council decided to raise the three key ECB interest rates by 25 basis points. Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 3.75%, 4.00% and 3.25% respectively, with effect from 10 May 2023.

The ECB has raised interest rates six times in a row. 50 points have been added each of the last three times. From this it should be understood that the continuous increase has pulled people back from taking loans.

The Irish Mortgage Holders Association estimates that mortgage holders will have to pay an extra €2,500 a year on average. This can result in late mortgage repayments.

The Governing Council of the European Central Bank (ECB) on Thursday decided to raise interest rates for the seventh time in a row. This suggests that previous rate hikes are working their way through the economy and that ECB policies are now restraining growth. The bank did not provide guidance on future moves.