The Bank of Israel, headed by Governor Prof. Amir Yaron, said interest rates in Israel would continue to increase from the current 2.75% to around 4.5 – 5% by the end of the year.

“Inflation is affecting a wide range of items, and over time more and more of these items are being identified with high demand. That is why we are continuing the process of raising the interest rate,” Yaron told the Israeli business publication Globes on Tuesday.

“Our estimates are that inflation will be between 4.5% and 5% until the end of the year and then a slow process of decline will begin,” he said, adding, “If everything goes according to plan, and all plans are subject to uncertainty, we predict that inflation will enter the target range by the middle of next summer and may be more in retreat towards the end of the summer.”

The rising interest rates affect many businesses and families, mainly due to an increase in mortgage rates, Yaron acknowledged.

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