The ECB is unlikely to move interest rates significantly higher next year and any rate hike will be modest, spelling good news for tracker rate mortgages, Irish economists have said.
Following the central bank's first meeting of the year, ECB head Mario Draghi sounded a dovish tone on the prospects of any toughening of monetary measures, as a key survey pointed to little or no growth across large eurozone economies in recent months.
Philip O'Sullivan, chief economist at Investec Ireland, said the expectations of a rate rise this year had been pushed out into 2020 in recent months as surveys showed growth in the eurozone economy slowing.
Next year, there was an increased chance the ECB would only increase interest rates by a quarter point, which meant "good news" for tracker mortgage holders, Mr O'Sullivan said.
Alan McQuaid, economist at Cantor Fitzgerald, also predicted at worst "a modest" interest rate hike next year. He said there was a chance that the ECB would need to ease monetary policy again to spur a flagging economy.
"I believe Mr Draghi is a dove," Mr McQuaid said, saying that the ECB president didn't want to repeat the mistake of his predecessor Jean-Claude Trichet who has been heavily criticised for his handling of the debt crisis.
Mr McQuaid said that Mr Draghi wanted to end his term later this year by preserving his legacy as the man who saved the euro.
"A dovish Draghi was what the market was expecting. And a dovish Draghi is what the market got. Inflation forecasts were downgraded and risks, Draghi said, had moved to the downside," said Fiona Cincotta, a senior market analyst at Cityindex.
"On the positive side, Draghi’s comments that he doesn’t see a recession coming for the eurozone area, just a sharp slowdown offered some solace to the otherwise negative press conference. The message that Draghi is not panicking yet was well received by a market," she said.
Chris Beauchamp, chief market analyst at IG, said Mr Draghi had helped "calm investor nerves about a broader slowdown in Europe".