European Central Bank president Jean-Claude Trichet said today that he did not rule out further rate cuts after the ECB lowered its main lending rate to an all-time low of 1.25%.
Earlier, the ECB shocked financial markets today by cutting its main interest rate by a smaller-than-expected quarter of a percentage point.
The vast majority of analysts had expected the rate-setting Governing Council to cut the main refinancing rate by half a percentage point.
The ECB has now cut its benchmark rate six times from 4.25% since last October as the euro zone economy has gone from bad to worse.
The latest economic data have shown little sign of a let up in the recession, while annual inflation hit a record low of 0.6% in March and is expected to fall further.
Halifax, Bank of Scotland (Ireland), Permanent TSB, EBS and Irish Nationwide have said they will pass on the full 0.25% ECB rate cut announced today to all its variable and tracker rate mortgage borrowers.
AIB has said it will pass on the ECB rate reduction in full to owner-occupier mortgage customers, as have Bank of Ireland and ICS Building Society.
Speaking on the prospect of further cuts in interest rates, Trichet said: 'Is it the lower limit? I would say very candidly, it is not the lowest limit as I don't exclude that we could, in a very measured way, go down from the present level.'
He later indicated that another cut of 0.25% points was on the cards for May and that the ECB governing council could also announce more unorthodox measures to boost the economy that many term quantitative easing.
'It is the intention of the (ECB) Governing Council to decide on further non-standard measures. It is our intention to decide at the next meeting,' on May 7, Trichet said.
PIBA recommends fixed rate mortgages
PIBA, the country’s largest group of independent brokers, has reacted to the ECB’s cut by telling mortgage holders that this could be the best time for them to think about getting a fixed rate.
PIBA spokesperson, Rachel Doyle said that 'the interest rate cut of 0.25% would mean that a person with an average mortgage of €250,000 at a variable rate of 3.55% over a 35-year term would be saving €35.98 a month'.
She added that there is 'great value' in the market at the moment, and that customers should consider fixing their rates before inflation becomes a factor again.
