The cost-of-living misery is being compounded by the government’s utter culpability in allowing banks to rip people off with the highest interest rates in the EU, as the European Central Bank (ECB) raises its key interest rate by 0.75 percent to 1.25 percent, the highest since 2011, with further moves now anticipated in October and December, according to the Rural Independent TDs
Speaking from his Tipperary constituency, and reacting to the latest ECB rate hike, the leader of the group, Deputy Mattie Mc Grath stated:
“The crippling cost of living crisis, which is being driven by energy prices, has not been tackled by the government adequately. Now, government politicians remain mute as banks, who already charge the highest interest rates in the eurozone, are allowed to increase rates further.”
“The Minister for Finance has done absolutely nothing to protect Irish mortgage holders during his tenure; rather, he has sided with banks and bankers through an open-door arrangement.”
“The Minister’s silence as the ECB proceeds to hike interest rates – its tool to combat inflation even though doing this will not reduce energy costs or supply chain disruptions – is truly flabbergasting.”
“This inaction means that almost half a million Irish variable rate mortgage holders are whacked by today’s second ECB interest rate hike, as the cost-of-living crisis gets worse by the day.”
“Much higher monthly loan bills are a looming certainty, as the ECB today raised its base interest rate by 0.75 percent to reach 1.25 percent. This hike follows the 0.5 percentage point increase in July, arriving at a time of record cost of living price pressures. Cumulatively, today’s move will add over €200 per month to the average Irish €200,000 mortgage.”
“These hikes come on top of average fixed interest rate mortgages of 2.77 percent with variable rates averaging 3.64 here, compared with a euro-zone average rate of 1.59 percent. For instance, in Finland, a country similar to Ireland, the average rate is just 0.95 percent. Essentially, this translates into people paying as much as €2,000 more per year, or tens of thousands more in interest rates over the mortgage lifetime compared to our European counterparts for the same product, according to the central bank’s own data.”
“Thus, Ireland’s 730,000 mortgaged households, of which almost 500,000 are on trackers directly tied to ECB rates, are being fooled. The 47,062 homeowners in mortgage arrears, according to central bank figures, will be brutally impacted by all interest rate hikes, with many facing the prospect of losing their home.”
“People are already under huge financial pressures, and despite its spin, the government has largely done nothing. Consequently, news that the ECB is hiking interest rates further is a real hammer blow to Irish mortgage holders.”
“The government’s abject failure to instruct the central bank regulator to impose caps on mortgage interest rates is scandalous. In opposition, Fianna Fail promoted a policy of capping mortgage interest rates, at a time when rates were lower; now in government at a time of rising rates, the party changes position and fails to protect borrowers, staying in favour with the bankers.”
“The government’s dual failure to adequately deal with the cost-of-living crisis and mortgage rates means people are being screwed, and that the probability of a recession is increasing hourly.”
“Higher rates add significantly to the cost of living and the housing crisis as affordability is greatly impacted. A government that allows banks to do as they please, puts profits first, and fleeces the people, must be booted out of office at the next election,” concluded Deputy Mc Grath.
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