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Interest rates could see more hikes in Denmark after latest raise

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Ritzau/The Local - [email protected]
Interest rates could see more hikes in Denmark after latest raise
Higher interest rates can mean increased payments for flexible mortgage holders. Photo: Thomas Lekfeldt/Ritzau Scanpix

An expert has warned that interest rates may not have peaked in Denmark after the central bank, Danmarks Nationalbank, put its rate up.

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The Danish central bank, Nationalbanken, raised its lead interest rate on Thursday night by 0.5 percent to 1.75 percent.

The national bank thereby follows the adjustment made by the European Central Bank, ECB, which raised its own rate earlier on Thursday to 2 percent.

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Nationalbanken has raised Denmark’s central interest rate four times this year.

The raised interest rate means that people who have variable rate mortgages could find themselves paying more for their loans.

“The market is accounting for more increases now, and that is noticeable,” Danske Bank senior economist Las Olsen told news wire Ritzau in a written comment.

Thursday’s raised interest rate means the interest on loans is now at the highest level for 13 years, according to Ritzau.

But more increases are yet likely.

“We are going into 2023 with an outlook of even more interest rate increases,” Arbejdernes Landsbank senior economist Jeppe Juul Borre told Ritzau.

Around 200,000 homeowners are due to see new interest rates set on their flexible rate mortgages later this month. The new increase in interest is unlikely to mean good news for the homeowners, Borre said.

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