Economists warns interest rates could rise

A leading economist has warned mortgage interest rates could double over the coming three years.

Eoin Fahy predicted interest rates would rise to 6% by 2007 in a report for KBC Asset Management.

Mr Fahy reportedly warned economic growth in the eurozone could force the European Central Bank to raise rates in an effort to curb inflation.

If interest rates were to double, it would see the cost of repayments on a €200,000 30-year mortgage rise by €400-a-month.