Interest rate almost unchanged in January
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The Dutch long-term interest rate, based on the return of the latest ten-year government bonds, averaged 3.3 percent in January, almost the same as in December. In that month the long-term interest rate fell by 0.1 percent point.
The European Central Bank (ECB) did not change its interest rate in January 2006.The last ECB rate change was in December 2005, when it was raised by 0.25 of a percent point. The lowest rate on the market is the ECB deposit rate, which is 1.25 percent as of December 2005. The main ECB interest rate, the repo rate, is 2.25 percent as from December 2005. The Economic Monitor’s focus published on 1 December 2005 examines the relationship between the capital market interest rate and interest rate interventions by the ECB.
One main reason for the ECB to change its interest rate is the inflation rate in the eurozone. In the last couple of years inflation stayed around 2.1 percent, with a dip in February 2004 to 1.6. The inflation rate in the eurozone in December averaged 2.2 percent. This is 0.1 of a percent point down on November 2005. Eurostat, the statistical office of the European Communities, expects inflation in the eurozone to be 2.4 percent in January 2006.