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Ireland urges ECB to be cautious on rate hikes
Very high interest rates being charged by some lenders is putting pressure on ordinary households, says Irish FM
Ireland's Minister of Finance Michael McGrath speaks to the press as he arrives for the Eurogroup meeting at the EU headquarters in Brussels on March 13, 2023. — AFP file
Ireland called on the European Central Bank on Saturday to temper interest rate rises ahead of a decision next week, citing their "real-life" impact on ordinary people.
The ECB has raised rates by 3.5 percentage points since July in an unprecedented campaign of monetary tightening to rein in inflation.
Irish Finance Minister Michael McGrath urged the ECB "to take account of the real-life impact on people of the decisions that are made".
He noted growing pressure on homeowners whose interest rates have exploded during an informal lunch in Stockholm with his EU counterparts and the ECB chief Christine Lagarde, which he described as "particularly open and frank" on Friday.
"In particular we've seen in the non-bank sector in Ireland very high interest rates being charged by some lenders and that does place pressure on ordinary households," he told journalists.
Despite inflation in the euro area falling after it hit a peak of 10.6 per cent in October, the Frankfurt-based ECB is expected to raise rates on Thursday.
In March, consumer prices in the eurozone rose by 6.9 per cent on an annual basis -- far from the ECB's two-percent target.
McGrath said business also had a role to play, adding "that where prices are falling, we need to see the benefit of those reductions being passed on to consumers by way of price reductions".
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