Variable mortgage holders to be hit with another interest rate hike

Another large interest rate hike by the European Central Bank is expected to be announced later today in an effort do dampen inflation, amid concerns that the move could deepen an impending Eurozone recession.

The ECB is expected to raise its key interest rates by 75 points for the second consecutive time.

Eurozone inflation stood at just under 10% in September, nearly five times the ECB’s two-percent target.

The interest rate hikes will increase repayments for over 400,000 tracker and variable mortgage holders in Ireland, just as it did in September.

Just last month the ECB confirmed that it has lifted its deposit rate to 0.75% from zero and raised the main refinancing rate to 1.25%. This is their highest level since 2011.

The latest increase comes after the ECB hiked rates by 50 basis points in July, its first increase in over a decade.

"Over the next several meetings the Governing Council expects to raise interest rates further to dampen demand and guard against the risk of a persistent upward shift in inflation expectations," the ECB said in a statement last month.

ECB president Christine Lagarde warned recently that inflation was “far too high” and more action was required to prevent price shocks from becoming “entrenched”.