Long-term interest rates on the rise: Ulster Bank 'Focus'

Long-term interest rates are set to rise sharply in the year ahead, by as much as 0.5% by year end, according to Ulster Bank’s Focus for March 2005.

“For debt managers who wish to secure fixed term funding at levels near to long-term variable rate averages, time could be of the essence,” says Niall Dunne, Ulster Bank’s financial markets strategist and author of the report.

“The European Central Bank last week decided to leave the Eurozone’s overnight interest rate on hold at 2% for the twenty-third consecutive month.

"However, there are many other interest rates in the market, such as the rates charged on fixed term loans of three, five or 10 years duration. The ECB has little control of these longer-term rates, and unfortunately, these rates are starting to rise,” he added.

In the Focus report, Dunne warns that fixed term debt costs have risen by almost 0.5% since the start of the year due to events in America.