# How long will ECB base rate stay low for?



## RMCF (4 Aug 2010)

The ECB base rate is currently at 1%.

Some experts reckon the UK base rate of 0.5% (at this since March 2009) could stay until 2014, forced to because of the UK Gov's spending cuts.

http://www.bbc.co.uk/news/business-10756094

What are the chances of the ECB keeping their 1% rate for the foreseeable future? Is it ever likely to remain as long as a couple of years?


----------



## aristotle (4 Aug 2010)

Obviously no one knows for sure but I have generally read that ECB rates should start rising again in the first half of next year.


----------



## RMCF (4 Aug 2010)

aristotle said:


> Obviously no one knows for sure but I have generally read that ECB rates should start rising again in the first half of next year.



Read that myself, which will see tracker holders starting to pay more.

But of course, even worse news for SVR mortgage holders - 2010 and 2011 is going to be tough for so many of these folk.

On a positive though, better news for savers, who are getting very poor returns the last couple of years.


----------



## thespecialon (5 Aug 2010)

it will stay as low until inflation looks to becoming a threat..so keep an eye on the CPI's in the main economies of Germany + France, if these start rising,expect a ECB rate rise..of course there are other factors but I think this is the main one.


----------



## divot (10 Aug 2010)

This is a real how-long-is-a-bit-of-string question.  I personally think that Europe is a long, long way from being out of the woods.  There's a lot of debt floating around that has not been dealt with (including huge amounts not in Ireland) - and a lot of ways that the Euro economy could be in for more big shocks leading to big legs down.

Talk of deflation is starting to spread - which mortgage-wise would mean that for those on trackers, increased payments aren't likely to be the enemy.  Wage deflation and unemployment are the more likely problems - not being able to meet the repayments.  Of course, those on variable mortgages could be squeezed both ways.

Germanys economy is of course key - but as so much of it is dependent on exports, they aren't likely to get a sustained and viable bounce if the global recession continues to bite on a wide scale...


----------

