More mortgage interest rate increases from the European Central Bank are likely, according to the Central Bank.
The financial services regulator determined that the Irish banking system has also proved resilient to recent turbulence and, additionally, has capacity to absorb potential future shocks. In his opening remarks, governor Gabriel Makhlouf said there was a sheer level of uncertainty owing to the interlocking shocks of the pandemic, Russia’s war against Ukraine and the current inflationary episode, alongside the speed with which these events have unfolded and transmitted across the globe.
The governor said the failures of banks internationally have provided another example of the speed with which risks can materialise. “What is key is that it remains very difficult to gauge how challenging it will be to get inflation down all the way to the target of 2% on a sustained basis, and the expectation is for further rate increases in the near term,” he said.