The ECB warned that mortgages would continue to rise in the coming months. The agency also announced more interest rate hikes, which it acknowledged would have a direct impact on mortgages.
Christine Lagarde assured that rates would continue to rise until inflation reached 2%. The ECB leader justified her insistence on the measures by appealing that it was her mandate.
It is true that the probability of a recession has increased and uncertainty remains high. In these circumstances, we all have to do our job. A central bank has to focus on its mandate. Our mandate is price stability, and we have to fulfill that by using all the tools available to us, choosing those that are most appropriate and efficient. Ultimately, persistently high inflation rates are more harmful to society because they impoverish everyone. Stable prices provide the foundation for a well-functioning economy where everyone benefits.
More interest rate hikes are coming
The Governing Council of the ECB decided to raise interest rates again by 75 basis points, so that the interest rate for its refinancing operations will be 2%, while the deposit rate will reach 1.50% and the loan facility, 2.25%.
Since July we have increased rates by 200 basis points, the largest increase in the history of the euro. But we still have not finished.
The president has insisted on the message that she offered last Thursday to undertake the new rate hikes meeting by meeting and evaluating in each of them the evolution in the macroeconomic and inflation perspectives, among other factors. The ECB's critical path has serious consequences; it will make mortgages more expensive, slow down economic activity and reward those who have money saved in their bank deposits.
The Effect of ECB Policy on Mortgages
Published in September Various economists from the entity estimated that house prices in the eurozone as a whole could register a short-lived fall of up to 9% in the next two years as a result of the rise in mortgage interest rates.
An elasticity study carried out by ECB economists
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