ECB rate change 'expected soon' - commercial mortgages

03 October 2008

Although the European Central Bank (ECB) has voted to keep interest rates the same, there is a "widespread expectation" that a cut may be made in the coming months, it has been claimed.

Rates were kept at 4.25 per cent in a vote carried out on October 2nd - however, the effect of the global slowdown on Europe may prompt the ECB to make a move by the end of the year, according to Paul Niven from F&C Investments.

A change has not been made since July, when rates were raised in an attempt to curb inflation in the Eurozone economy, but recent events may force the ECB to take action, Mr Niven stated.

"Despite the no change vote today, there is now a widespread expectation that rates in the ECB will be heading downward soon," he remarked.

Any change in interest rates could have an effect on the cost of commercial mortgages.

The Bank of England's monetary policy committee opted to maintain the UK's base rate at five per cent in September.