We will have to expect a significant drop in mortgage payments. At least another six months. At its last meeting on December 14, the European Central Bank announced its decision not to change interest rates following the constantly increasing increases in 2023. The decision paved the way for optimistic scenarios regarding the long-awaited installment housing loan and reducing loan costs. It also increased by 70% (at varying rates).
However, we need to be cautious about this possible decline: It will not happen immediately and will only be felt significantly after the ECB cuts interest rates. According to the proposal of Lando Maria Sileoni, general secretary of Fabi (Autonomous Federation of Italian Banks), this is unlikely to happen in the first six months of 2024.
Interest rate cut will not happen before next July
”Many observers think that the ECB will cut interest rates this year. Sileoni said the cut is unlikely to happen in the first half of the year, but it is more likely that this decision will be made between July and December. RaiNews24. According to the Fabi secretary, there is an element of hope that the ECB’s highest body, “in the competent presence of Fabio Panetta, who was president of the Bank of Italy for a few months”, “pursues a more careful monetary policy. We are making choices that suit the needs of our country.” said.
Similar statements came from ECB board member Boris Vujcic: “The European Central Bank will probably not cut interest rates before the summer,” he said while speaking to a Croatian television channel. N1. “We’re not talking about cutting interest rates right now and we probably won’t do that before the summer,” Vujcic said in response to a question about market expectations. said.
”The increase in the ECB’s cost of money caused mortgage and loan interest rates to rise very rapidly. For families – according to Sileoni – there has been an increase of up to 70% in installments on variable rate mortgages. It has become much more expensive for businesses to borrow money and new loans are actually falling sharply. Many companies choose to use amounts in their current accounts if they have already accumulated them. We have never shared the restrictive monetary policy of the European Central Bank, because in the fight against inflation there is no remedy simply to increase the cost of money,’ concluded Fabi secretary.
Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
