Anyone who has taken up a loan in 2019, no matter what type, benefited from historically low interest rates, which ultimately represented a considerable saving in loan rates. Anyone who carried out a detailed loan comparison of all eligible loan offers, could therefore justifiably be understood as the winner of the ECB policy. Now, the year 2019 is coming to an end and the question arises as to whether this level of interest rates on loans will continue to be this way in 2020. “The Governing Council continues to assume that the ECB’s key interest rates will remain at current levels or lower over a longer period and far beyond the end of the bond purchase programme,” the official Statement says.
Thus, the monetary policy stance has not been changed by the ECB head, which in plain terms means: interest rates on loans will remain at a similar low level for the consumer in 2020 (for the time being). Consumers, in particular, who plan larger, loan-financed purchases next year, can benefit from this statement. In particular, if the loan terms should be longer. So, if you take up a long-term loan next year and use the low interest phase to have this low interest rate fixed for a longer period of time at the same time, you will save a considerable amount of money. In addition, you are so well prepared against any but still rising interest rates.
However positive this last ECB decision this year is for the group of potential borrowers, so negative is the prospect for savers. Because the decision to continue to follow zero interest policy also means that on savings deposits of any kind hardly interest is incurred. Parking funds on overnight and / or fixed-term deposits is unlikely to be worthwhile in view of the weak returns. In addition, there is a risk that the corresponding deposit will tend to yield a “negative return” due to the inflation rate. To put it plainly: yields on overnight and / or fixed-term deposits run the risk of being “eaten up” by the inflation rate in 2020. Savers are certainly doing well to look again for alternatives and thus more profitable investment forms in 2020. And so it turns out again: one Joy, another suffering. In this case, as in 2019, potential savers will probably pay the price for the Central Bank’s zero interest policy.