European Union Interest Rates set at 3.75%

March 29, 2007

The European Central Bank raised its key interest rate a quarter of a percentage point to 3.75 percent, which is still well behind the UK rate of 5.25%.

The ECB sets monetary policy for a 13-nation economy of 317 million people and more than 15 percent of global gross domestic product.

The move is designed to ensure that inflation targets are maintained accross the EU.

Inflation in the 13 euro nations was estimated at 1.8 percent for February, according to EU data. That was unchanged from January, and below the European Central Bank's 2 percent guideline.

But the latest rise still makes Spanish mortgages significantly cheaper than those in the UK, where mortgage rates are typically 6.5%.

Spanish mortgages via the Bank of Valencia are still available below 5%.

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