Finance Minister Michael McGrath has called on the banking industry to demonstrate its support for mortgage-holders who are facing difficulties due to a series of interest rate hikes over the past year. This statement comes as new data reveals that eurozone inflation has stopped slowing down in August, just ahead of a meeting of the European Central Bank (ECB) next month to discuss further interest rate increases.
During a meeting with representatives from the banking and mortgages sector, Minister McGrath expressed his concern about the impact of rising interest rates on mortgage-holders. He acknowledged that many individuals are worried about their ability to meet their repayments now and in the future. Minister McGrath stated, “I believe that the vast majority of mortgage holders in Ireland are making a genuine effort to pay their mortgage. There are supports available, and with the rapid change in the interest rate environment, the industry must engage with their customers to prevent them from falling into arrears.”
Minister McGrath emphasized the need for the banking industry to demonstrate that it is providing support and certainty to borrowers in difficulty. He also called for the development of long-term sustainable solutions for borrowers. As a priority, he requested industry representatives to outline their response to this issue.
The meeting included chief executives and senior representatives from retail banks, retail credit firms, the Banking and Payments Federation Ireland (BPFI), and the Central Bank, among other organizations. Brian Hayes, CEO of BPFI, stated that its members are working closely with the Government and the Central Bank on this matter and will continue their engagement in the coming months to support borrowers in this challenging economic environment.
Since July of last year, the ECB has been tightening monetary policy at the fastest rate in its history in an attempt to control inflation. However, prices in the eurozone continue to rise, with a 5.3% increase compared to the same period last year. This figure is well above the ECB’s medium-term inflation target of 2%. The lack of improvement in inflation suggests that another interest rate increase is likely to occur next month, adding further pressure on struggling homeowners.
In summary, Finance Minister Michael McGrath has urged the banking industry to demonstrate its support for mortgage-holders facing difficulties due to interest rate hikes. Eurozone inflation has shown no signs of improvement, indicating the possibility of further interest rate increases. The government and industry representatives are working together to find sustainable solutions for borrowers in this challenging economic environment.