Thousands of people will see a mortgage hike with their repayments spiking by more than €1,000 a year after the European Central Bank raised interest rates by a record 0.75% yesterday.

The steep rise is in the face of the strongest inflation figures for nearly 40 years at 9.1% across the Eurozone.

The first to be hit in Ireland will be nearly 400,000 tracker mortgage-holders, whose repayments will rise immediately.

Variable rate borrowers are also expected to be hit on the double as their rates were left untouched by the main banks when the ECB rates rose in July.

The hike was described as "a big bazooka" by housing campaigner David Hall, of the Irish Mortgage Holders Organisation.

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But economists are forecasting another two rate rises this year, next month and another in December, with further hikes next year. ECB president Christine Lagarde said yesterday: "The Governing Council today decided to raise the three key ECB interest rates by 75 basis points."

Ms Lagarde said that the increase is a bid to cool soaring inflation across Europe and reduce it to the ECB's 2% medium-term target. "Based on its current assessment, over the next several meetings the Governing Council expects to raise interest rates further to dampen demand and guard against the risk of a persistent upward shift in inflation expectations."

However, one leading economist said there was some "panic" around the record increase. Austin Hughes said: "The ECB has moved markedly from a stance of patience to one of panic in relation to its response to higher inflation."

While interest-rates campaigner David Hall said: "It's a massive bazooka and a massive scud missile. Don't forget the 0.5% from July hasn't been passed on yet to variable mortgage customers.

"It's gone to trackers but it hasn't come to variables, so now does it go up 0.75% or 0.5% or 1.25%?

"If you're on a tracker, essentially your mortgage interest has doubled now. You've gone up 1.25%, effectively most people on trackers their interest rate has doubled."

Someone with an 80% 30-year mortgage on the average house price of €340,500 is currently paying an average of €1,128 a month but once the 0.75% rise kicks in their repayments will rise to €1,236, an extra €108 a month or almost €1,300 a year.

Mr Hughes predicts a further two hikes this year as inflation is still rampant. The ECB move follows the US Federal Reserve and other central banks in a global stampede of rapid rate hikes meant to dampen record inflation that is squeezing consumers and pushing Europe towards recession.

Ms Lagarde added: "The Governing Council took today's decision, and expects to raise interest rates further, because inflation remains far too high and is likely to stay above target for an extended period."