THINK Ahead: Are rate hikes pointless? in Stock News 14/06/2026 Are rate hikes pointless? Long-suffering readers will know that, in my occasional bid to prove I’m still young – and definitely not edging towards a midlife crisis – I like to talk in memes. And this week’s ECB meeting got me thinking about that one of a skeleton sat patiently on a park bench. Because that’s roughly how old I’ll be when this week’s rate hike fully feeds through to Europe’s economy. Cue one of my favourite charts (I know, it’s a sad existence…). It shows that since 2021, average eurozone mortgage rates for existing homeowners have risen by less than one percentage point – despite 450bp of rate hikes. And while rates have since been cut, that average mortgage rate keeps on rising. Admittedly, it depends on where you look; Dutch and French homeowners have been the most insulated from hikes, while Portuguese and Finns are the least. But the big picture is simple. Around half of eurozone mortgages are fixed for more than 10 years. That means the rate hikes from four years ago are still working their way through – and will be for several years to come. And that’s before we even think about this week’s extra 25bp. One interesting consequence is that rate hikes can initially *boost* household incomes. Savings rates adjust quickly, whereas mortgage payments largely don’t. National accounts data shows net interest income for households actually rose as a share of disposable income in both the eurozone and UK after the last hiking cycle – a sharp contrast to when rates rose ahead of the financial crisis. None of this means rate hikes are in some way stimulative, as some have occasionally argued. In the UK, for instance, shorter mortgage fixes mean consumers know any savings windfall today will give way to higher repayments in the future – and they tend to act accordingly. And those receiving higher interest income aren’t necessarily the same people facing higher repayments – and the latter are mor