Investing.com - The European Central Bank (ECB) has announced a halt to raising interest rates due to falling inflation and a decline in lending. The announcement was made by ECB Council member Boris Vujcic on Croatian state television HRT1. The ECB, under the leadership of President Christine Lagarde, recently paused its unprecedented tightening campaign, maintaining interest rates for the first time in more than a year.
Euro zone inflation, which peaked at 10.6% in October 2022, is forecast to fall to 3.1% this month. This is in line with the ECB's 2% target according to recent economic forecasts. In response to these developments, commercial lenders have promptly adjusted mortgage and loan interest rates. However, savers see less impact from these changes.
Vujcic further noted that Croatian banks have not raised deposit interest rates as significantly as German banks. Instead, they are offering cheaper mortgages and loans in the euro zone's newest member state. He expressed confidence in achieving the ECB's 2025 inflation target.
President Lagarde predicts there will be no immediate interest rate hikes and expects borrowing costs to remain stable until 2024. This is part of the ECB's strategy to manage falling inflation and the slowdown. loan after implementing various measures.
