There is good news for Danish homeowners and businesses from the European Central Bank (ECB) on Thursday afternoon. As expected, the ECB is lowering its deposit rate by 0.25 percentage points to 2.75 percent. This is the fifth interest rate cut in a row since June, when it was four percent.
As mentioned, the markets expected the central bank to ease interest rates in light of the fact that inflation is under control and that the European economies need artificial respiration to get back into gear. Frederik Engholm, chief strategist at Nykredit, believes in this light that the ECB could raise the lowered interest rate even further this time.
- It is very difficult to see something that would suddenly make the European economy boom, but it is easy to see conditions that could slow it down further. Not least Trump. Therefore, the current approach from the ECB seems overly cautious, he writes in a comment on the figures.
Sune Malthe-Thagaard, chief analyst at Totalkredit, calls today's interest rate cut good news for homeowners with variable-rate loans.
- If the cut had not occurred, the interest rates on F1, F3 and F5 would have increased. And it would have been incredibly unfortunate timing, especially for those who are going to have their F1, F3 and F5 loans at an interest rate auction next week. We expect that the interest rates will end up at 2.4-2.5 percent, and today's interest rate cut plays an important role here, as it was already factored into the interest rate levels, he says.
Expecting more interest rate cuts this year
Chief economist Tore Stramer from Dansk Erhverv does not expect this to be the last time the ECB lowers interest rates. He predicts that we will see three or four more interest rate cuts this year, so that the interest rate at the end of the year will be 1.75 or 2 percent.
- Inflationary pressure has fallen over recent months, and the fall is now also being seen in the service sector. In addition, it is unfortunately very clear that growth continues to develop very weakly in the euro area, and that there is no real improvement in store for the coming months, he believes.
Recent figures from the EU's statistics office, Eurostat, also show that the economies of the EU countries overall only grew by 0.7 percent in 2024. Lower interest rates can help to increase investments that can kick-start the economies again.
As usual, the Nationalbank is expected to follow suit and lower the Danish interest rate by 0.25 percentage points later on Thursday.
/ritzau/
Text, graphics, images, sound, and other content on this website are protected under copyright law. DK Medier reserves all rights to the content, including the right to exploit the content for the purpose of text and data mining, cf. Section 11b of the Copyright Act and Article 4 of the DSM Directive.
Customers with IP agreements/major customer agreements may only share Danish Offshore Industry articles internally for the purpose of handling specific cases. Sharing in connection with specific cases refers to journaling, archiving, or similar uses.
Customers with a personal subscription/login may not share Danish Offshore Industry articles with individuals who do not themselves have a personal subscription to Danish Offshore Industry.
Any deviation from the above requires written consent from DK Medier.
