Finance Minister expects to see deposit rates rising soon
The Minister for Finance has said he anticipates the rate of interest which is paid on savings accounts will increase in the weeks ahead.
Michael McGrath said that while these are “commercial decisions for the banks”, he expects to see an increase.
“The banks have not fully passed on increases in interest rates to mortgage holders, but they’ve passed on even less of the increase in the ECB interest rates to savers and depositors. So, I do think that mismatch will be addressed, and we will see progress on that over the coming weeks,” he said.
Mr McGrath said he has held discussions with the NTMA, who are responsible for the State savings schemes, and said that the agency will bring a proposal to its own board next week.
“That will involve an improvement in the rates of return being paid on some of the state savings products being offered by the NTMA,” he said.
On energy prices, Mr McGrath said he also expects to see a reduction in energy prices in the coming weeks.
“We have yet to see a significant pass through of all of those reductions to the consumer level. I think some lag was justified,” he said.
“We do understand the nature of the commercial arrangements that those companies entered into the hedging and futures contracts. But many months have passed since we’ve seen the first reductions at a wholesale level. So I do expect we will see some reductions in the price of energy for households and for businesses in the weeks ahead,” he added.
However, he cautioned that any cuts are unlikely to bring us back to where we were before the war in Ukraine.