ECB cuts interest rates for the first time in almost two years

This reduction will immediately impact tracker mortgage holders. There are 179,000 customers with tracker mortgages who owe €15.4bn and represent 25% of the mortgage market.

European Central Bank president Christine Lagarde. Pic: AP Photo/Michael Probst

The European Central Bank (ECB) announced a 0.25% reduction to its main lending rate following an aggressive campaign of interest rate hikes used to drive down sticky inflation.

The base rate has subsequently reduced to 4.25%, marking the first interest rate cut announced by the regulator since it began increasing almost two years ago, and experts are pricing in at least one more reduction before the end of the year.