The European Central Bank (ECB) has cut its interest rates for the eighth time in a year.
The latest cut, announced on Thursday, is by a quarter of a percentage point which brings its rate down from 2.25% to 2%.
The move will immediately benefit those with tracker mortgages and put further pressure on banks to pass on rate cuts to those on variable rates.
With inflation now safely in line with its 2% target and the cut well-flagged, the focus has shifted to the ECB's message about the path ahead, especially since at 2%, rates are now in the "neutral" range where they neither stimulate nor slow growth.
The central bank for the 20 countries that share the euro offered few hints in its statement, however, sticking to its mantra that decisions would be taken meeting-by-meeting and based on incoming data.
"The Governing Council is not pre-committing to a particular rate path," the ECB said. "Interest rate decisions will be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission."
The ECB’s latest quarter-point cut equates to a €13 a month saving for every €100,000 owed on a tracker mortgage. That means that if you have an outstanding home loan of €250,000 you are likely to be better off by around €33 a month from the end of this month. Some will see even larger savings while some will see more modest savings.
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