What can we do about inflation and rate hike policies?

Q With inflation and mortgage rates rising, what can I do to protect my financial well-being?

A The European Central Bank (ECB) is changing the direction of interest rates as it tries to rein in inflation, which has risen sharply in recent months. The ECB could start raising interest rates again as early as September, and a lot will depend on how high inflation will be next year, according to financial wellbeing website founder MoneyWhizz, Frank Conway. If inflation stays high, the ECB will have little choice but to keep raising interest rates until inflation abates. As a rough rule of thumb, for every €100,000 in outstanding monthly repayments, this increases by around €15 per month. So, for someone with a $300,000 mortgage, monthly repayments increase by about $45 per month. For those who have both standard adjustable-rate mortgages and tracker mortgages, rising interest rates and monthly repayments mean they need to take extra steps to protect their financial well-being. For some, a switch to a fixed-rate mortgage is possible. Now is a critical time for all families to keep their household finances in good shape, Mr Conway said. The most practical way to do this is by using a personal budgeting tool. As the cost of borrowing rises and inflation erodes household savings, families may have to cut back on spending. When this happens, it can impact the economy. Some economists are forecasting an economic slowdown, others a recession. Families should check whether they are entitled to a refund of any possible tax relief/tax credit etc. from the tax office. Mr Conway also advised consumers to reduce food waste. He said people could learn more at mywaste.ie.

https://www.independent.ie/business/personal-finance/what-can-we-do-about-inflation-and-moves-to-increase-interest-rates-41843718.html What can we do about inflation and rate hike policies?

Fry Electronics Team

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