 The Iran conflict has pushed future rate expectations higher, quietly reducing break fees for many fixed-rate borrowers. Irish lenders haven't yet repriced their products upward.
What Has Changed? Since the start of the current conflict in the Middle East, Eurozone inflation jumped from 1.9% in February to 2.8% in June. This has been driven almost entirely by rising energy costs. Ireland recorded 3.4% annual inflation in June. In response, bond and money markets have moved sharply. The European Central Bank (ECB) increased the deposit rate from 2% to 2.25% in it’s June meeting and markets are pricing in a 70% chance of another hike in September. |