Mortgages, Visco: “Pause for rate hikes within the year”

The governor of Bank of Italy: “ECB will maintain a restrictive approach for a while longer. Those who took the variable should have known the risk of an increase”

”Once we have reached a correct level (of interest rates ed) you will need to maintain that level for some time. I don’t think we are very far from where it will be necessary to maintain it” and ”surely” it will be before the end of the year. This was stated by the governor of the Bank of Italy, Ignazio Visco, speaking on Sky TG24 about the ECB’s monetary policy.

After the expansive economic policy in recent years “we raised rates by 4 percentage points, which is a lot but it is still a level compared to current inflation with negative real interest rates”, recalls the governor. ”Compared with an expected falling inflation it is restrictive and we we will maintain this restriction for a while until there is a return to price stability. Too? I think it’s right”.

”We will maintain this restriction for a while, until the return of price stability. I think it’s right, you have to be cautious and patient because the effects of monetary policy can be seen over time, one and a half to two years. We must be careful and cautious ”, he underlines.

Visco then recalled that “rates can be fixed and variable, those who chose the variable must have also had the perception that, being variable, if there had been an increase that would have been a higher cost. Not everyone is able to predict, there needs to be more information on the one hand, but also the willingness to understand the risk on the other”. Furthermore, underlines the governor, those who have taken a fixed rate say: ”But how? We help those who have a variable and have already earned, because it is lower than the rate at which I have committed”. Visco also points out that ”only a third” of those who have a mortgage have a variable rate, and moreover ”those who took it out this year also have a ‘cap’, a limit within which they cannot go up . ”They are a series of measures underway that will help the most needy, those really in difficulty”.