European Central Bank cuts interest rates for the first time since 2016.
The European Central Bank (ECB) has decided to lower interest rates for the first time since 2016 following the tightening cycle of monetary policy started in 2022, easing loans for families. Check out the numbers.
If you need more immediate relief on your mortgage, contact the credit intermediaries from Poupança no Minuto and find solutions such as renegotiating your current conditions or transferring your credit to another bank with a lower monthly payment. Visit Poupança no Minuto for more information.
BCE lowers the three interest rates, as predicted by analysts.
The European Central Bank (ECB) decided to lower, for the first time since 2016, the three interest rates, confirming analysts' predictions.
This descent will now allow a relief on the loans of families and companies that had variable rate loans indexed to Euribor rates. More Information
According to the information shared by Notícias ao Minuto, the fixed rate for main refinancing operations dropped to 4.25%, the rate for permanent liquidity provision decreased to 4.5%, and the rate for permanent deposit facility fell to 3.75%.
"Since the ECB's September 2023 meeting, inflation has dropped more than 2.5 percentage points and inflation prospects have significantly improved," reads the ECB's explanation in the news.
"The underlying inflation also slowed down, reinforcing signs of weakening pressure on prices, with inflation expectations falling across all horizons. Monetary policy kept financing conditions restrictive. By dampening demand and keeping inflation expectations well-anchored, this fact contributed significantly to the decline in inflation," read more.
In order to "ensure a timely return of inflation to its medium-term inflation target of 2%", the ECB emphasizes that it will "maintain its key interest rates sufficiently restrictive for as long as necessary".
“The ECB's governing council will continue to follow a data-dependent approach and meeting-by-meeting in determining the appropriate level and duration of restrictiveness," specifying that "its decisions on interest rates will be based on an assessment of inflation prospects, in light of economic and financial data as they become available, underlying inflation dynamics, and the robustness of monetary policy transmission,” cites the news.
However, it is still noted that the ECB's council does not yet commit to a specific interest rate trajectory. This is in the context of an increase in inflation in the euro area, two tenths of a percentage point from April to May, reaching 2.6%.
It should be noted that the decrease in interest rates in question was the first since March 2016, even though it reduced the price of money from 0.5% to 0% and lowered the deposit facility rate to -0.5% in September 2019. This is also the first decrease since the beginning of the tightening cycle of monetary policy, with 10 consecutive increases between July 2022 and September 2023.
If you have a variable rate mortgage, indexed to Euribor and subject to interest rate fluctuations, and need a lower installment in the short term, know that there are other solutions that can alleviate this burden in a more immediate period. By renegotiating your conditions or transferring your credit, you can change your interest rate regime and access the current attractive campaigns of banks with mixed rates, to relieve your monthly payment.
The credit intermediaries of Savings in a Minute can help, for free, throughout this process! Simulate the transfer of your mortgage with us, and start your saving process now!