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Government must act on signalled ECB interest rate hike – Doherty

9 June, 2011 - by Pearse Doherty TD

Speaking amid speculation that the European Central Bank is to raise interest rates next month Sinn Fein Finance Spokesperson Pearse Doherty has said that the Government must act to prevent banks from passing any interest rate hikes onto mortgage holders and businesses.

It is believed that the ECB is considering at least two additional interest rate hikes before the end of the year.

Deputy Doherty said:

“Today’s signalling by the European Central Bank of a potential interest rate hike next month is a devastating blow for mortgage holders and businesses across the country. Tens of thousands of families struggling to pay household bills and mortgages simply will not be able to afford any interest rate hikes. Jobs will be threatened in thousands of small and medium sized businesses who are already experiencing a credit drought.

“Fine Gael and Labour have a Programme for Government commitment to direct banks in receipt of state support to absorb interest rate hikes. Such direction should include forcing banks covered by the blanket banking guarantee to absorb future ECB interest rate hikes.

“Unfortunately the Government failed to act on this commitment when the ECB raised interest rates by a quarter of a percent last April.

“I am calling on the government to urgently bring forward its proposals on this matter to ensure that if and when the ECB raises its interest rates ordinary homeowners and businesses people are not once again left shouldering the burden of an economic crisis that was not of their making.”

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