As the Central European Bank raises interest rates again this month there is a warning there will be two further rises with the basic interest rate rising to 1.75% by the end of 2011.
Last week the Bank raised interest rates by a quarter of a percent to 1.25% to “put a brake on inflationary pressures.” Inflation in the Eurozone has risen for the fourth month running.
Mortgage and lending rates from high street banks are likely to be set around 2% as a result of the change.
Before the financial crisis the lowest interest rate set between June 2003 and December 2005 by the European Central Bank was 2%. Between May 2008 and May 2009 rate was set at 3.25%. In May 2009 the rate fell to an historic low of 1%.
