The ECB summit decided today to raise the three different interest rates by 0.75 percentage points. This should cool inflation. “Inflation is still too high and will remain above target for a long time. Inflation in the euro area was 9.9 percent in September. Paul D’Hoore explains in the video above. what it means for your wallet.
Glenn Haex, Yorick Dupon
Last update:
20:32
ECB executives also plan to raise interest rates further. The ECB pursues an official inflation target of 2% over the medium term.
As interest rates rise, the loan becomes more expensive. This should lead, for example, to companies and individuals to borrow less. By cooling the economy in this way, demand should decrease, so that prices rise less rapidly.
More interest on the savings account?
By getting more interest on savings quickly, we shouldn’t immediately rely on this in big banks, according to Paul D’Hoore: “There are a number of smaller banks that have already done this. These are the exceptions for the moment, because the big banks are still on the slowdown. They say they can’t because they have to pay the Belgian state a 0.33% tax for all money in savings accounts. “There is starting to be room due to interest rate hikes, VTM NIEUWS money expert said. , but the banks are “in no hurry”.
Because it has already gotten more expensive in recent months to borrow for a home, for example, D’Hoore doesn’t expect it to rise any further.
Third relaunch
This is the third consecutive increase in interest rates. In July, the ECB raised interest rates by half a percentage point, the first rate hike since 2011 after years of historically low interest rates. Last month it added 75 basis points, the biggest increase in more than 20 years. Now another 0.75 percentage points are added.
The three interest rate hike will take effect on November 2nd. For example, the key interest rate for major refinancing operations – the interest banks pay to borrow money from the ECB for a week – will rise to 2%. The much-discussed deposit rate rises to 1.5 percent. This is the interest banks receive when they park excess money at the ECB for a short period of time. This rate has been negative for years, forcing banks to pay to deposit their money with the ECB, an incentive to pump money into the economy.
LOOK. The ECB summit decides to raise 3 different interest rates
The European Central Bank raises interest rates: what does this mean for your savings, investment and loan account? Our money expert Véronique Goossens, Belfius’s chief economist, answers the main questions. (+)
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