At a meeting in Amsterdam, the European Central Bank announced in July that it would raise interest rates by 0.25%.
Eurozone interest rates remain negative at minus 0.25%, but the ECB will end its long-term asset purchase program to reverse spiral interest rates.
“High inflation is a challenge for all of us, the mayor,” the bank said. “The Governing Council will ensure that inflation returns to its 2% target in the medium term. In May, inflation will rise again significantly, mainly due to rising energy and food prices, mainly due to the effects of the war. Has risen to.
According to CBS, inflation in the euro area averaged 8.1% in May, while inflation in the Netherlands was 8.8%.
The ECB last raised interest rates in July 2011, but the Bank of England and the Federal Reserve have already raised interest rates several times this year. The ECB said in a press conference that if interest rates stay high or rise further, they could raise another 0.5% in September.
ING said the central bank was able to end “a long era of unconventional monetary policy” and “find a compromise between pigeons and hawks.” We immediately avoided the 0.5% rise, but opened the door to do this in September.
“The era of net worth purchases will end in three weeks, and the era of negative interest rates will end by the fall,” ING said in a reaction. Simply put, the ECB has just announced the end of a long era. However, it is not yet clear whether this is also the beginning of a new era in which interest rates continue to rise.
It is unclear how this decision will affect savings and mortgage rates, which have already risen since January. NVM reported that in the first three months of 2022, home prices fell 2.1% in the previous quarter. This indicates that the Dutch housing market may be stable.
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