AIB to hike charges on deposits with negative rates as ECB long-fingers rate tweaks

While euro zone inflation is currently running at 2-1/2 times the ECB’s target of about 2 per cent, the central bank is currently sticking to the line that it does not plan to increase its rates this year, as it views the spike as a temporary phenomenon triggered a reopening of economies following Covid-19 lockdowns.

“AIB has insulated the vast majority of our customers during a sustained period of European negative interest rates. The huge growth in customer balances, especially during the pandemic, has increased the cost to the bank of providing current and deposit product services, including negative interest rate costs,” a spokesman said, confirming the rate and threshold changes to The Irish Times. “As a result the bank has continued to keep its negative interest strategy under constant review.

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