How does the interest rate develop in September? Read our mortgage interest forecast for this month. In it more about the long-term course of the ECB.
Mortgage interest rate adjusted step by step
This summer the European Central Bank (ECB) kept its powder dry. The central bank waited for the consequences of the Brexit referendum. The effect of earlier measures, such as buying up corporate bonds, was also not yet clear. The policy interest rates thus remained the same and the buy-back program was continued according to plan.
Over the past month, therefore, lenders continued to adjust their mortgage rates step by step to the low market rates.
Analysts predict new measures
Analysts took into account that the ECB would launch new measures in September to stimulate the economy in the Eurozone. Inflation has not exceeded 0.2% in recent months. The central bank still has the objective (and mandate) to bring inflation to almost 2%.
Would the buy-back program be extended or extended, or perhaps the policy interest rates reduced? Critics of current low-interest policy were even talking about a different rate, that of helicopter money.
All eyes on Frankfurt
On 8 September, all eyes were on Frankfurt where the Governing Council of the ECB met. However, the central bank decided to keep the policy rates and the buy-back program unchanged.
We therefore expect that mortgage interest rates will remain low this month and that they may fall slightly further.
“For a longer time”
In the press conference that followed, ECB President Draghi gave a little more about the expectations and policies of the central bank for the coming years. The ECB is satisfied with the implementation of current policy. However, they have become slightly more negative about economic growth for 2017 and 2018. This has been adjusted from 1.7% to 1.6%.
The Governing Council therefore expects the ECB’s policy rates to remain at the current level or lower for a longer period of time. The purchase program, which runs until March 2017, can also be extended.
In this way, the central bank will continue to depress mortgage rates. Read more about the interest rate development for the coming months in the 2016 mortgage interest rate expectation.