Commenting on today’s decision by the Governing Council of the ECB to leave interest rates unchanged at 0.25%, Director of Research at property consultants Savills Ireland said:

“It was probably premature to expect the ECB to cut rates today given the potential for any escalation of the unrest in Crimea to push up oil and gas prices in Europe.  However, it is now clear that the ECB is concerned about low inflation and, looking ahead, further rate cuts are certainly back on the agenda.”

In addition to cutting the costs of borrowing for home owners, McCartney noted that any future rate cuts would benefit the overall economy by leading to higher inflation rates:

“We are used to thinking of inflation in negative terms.  But in a heavily indebted country like Ireland, inflation will reduce the value of the moneys that have to be repaid in the future, thereby making the debt burden more sustainable in the long term.”