ECB Draghi remarks may spell 'good news' for Irish tracker mortgage holders

ECB Draghi remarks may spell 'good news' for Irish tracker mortgage holders
Mario Draghi speaking at a press conference in Davos today. Photo: EPA/ARMANDO BABANI

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".

More on this topic

Imagining a Davos for the many that was actually serious about climate changeImagining a Davos for the many that was actually serious about climate change

Climate change activist teen tells Davos summit our 'house is on fire'Climate change activist teen tells Davos summit our 'house is on fire'

David Attenborough: If we wreck the natural world, we wreck ourselvesDavid Attenborough: If we wreck the natural world, we wreck ourselves

Refugee tells World Economic Forum of the plight of the displacedRefugee tells World Economic Forum of the plight of the displaced

More in this Section

Cork Airport welcomes Ryanair's newest summer destination for 2020Cork Airport welcomes Ryanair's newest summer destination for 2020

Saudi Aramco gains 10% in debut to clinch top seat at 1.8 trillion dollarsSaudi Aramco gains 10% in debut to clinch top seat at 1.8 trillion dollars

Amazon and Deliveroo tie-up in doubt as watchdog raises competition concernsAmazon and Deliveroo tie-up in doubt as watchdog raises competition concerns

Dublin Airport sees first monthly drop in passenger numbers since March 2014Dublin Airport sees first monthly drop in passenger numbers since March 2014


Lifestyle

Lizzo, Demi Lovato and Ashley Graham are among those prompting us to practise a little more self-love.5 times celebrities reminded us to be body positive in 2019

Wondering about wine for the big day? Leslie Williams has all the options, for every taste and budget.Something from the bar: The perfect drink selections this Christmas

Damon Smith faces the might of the First Order on the exhilarating Star Wars Rise Of The Resistance attraction at Walt Disney World in Orlando.Feeling the Force in Florida: Star Wars Rise Of The Resistance attraction opens at Walt Disney World

There’s nothing better than curling up with a good book over the Christmas holidays, says Kya deLongchamps.By the book: Our top home and interiors picks to curl up with over the festive season

More From The Irish Examiner