Calculations from major Spanish financial institutions suggest that April 2024 could be crucial for Euribor to be below its level 12 months earlier. That means it would be the moment when the… Mortgages Variables could begin to reduce their rates by conducting annual checks at lower rates than the previous year, just two years after they became positive. But Forecasts have fallen apart After this Thursday, the European Central Bank (ECB) approved another increase in key interest rates to 4.5%.
Apart from this figure, which confirms the highest level of interest since 2001, the subsequent message from the president of the monetary institution, Christine Lagarde, was not much friendlier. The ECB will continue to monitor inflation developments And while it appears that this could be the final surge, Frankfurt is not ruling out the possibility of action.
Euribor’s reaction was not long in coming increase its record of 4.06% and, which it was last week at 4.16%, at which it closed this Friday. And according to all the analysis houses’ estimates, it may continue to rise in the coming days until it approaches the average interest rate level of 4.5%.
In these circumstances it seems virtually impossible that the mortgage reviews will bring joy to the Spanish people, at least until after next summer. In fact, the Vice President of the ECB, Luis de Guindos, stated this Friday that it is not excluded that interest rates will not be reduced until June 2024.
“It’s a bet (of the markets), it may be right, it may not be right, it will depend on many factors,” said De Guindos, who The ECB’s message emphasized that a level of interest rates has been reached which, if maintained for the required period, It will be a “very important contribution” in the coming quarters to bring inflation back to 2%.
In fact, the government’s former Economy Minister Mariano Rajoy has admitted that given the current level of official interests, “there is a high probability” that inflation will be brought under control “in not too long.” Since then, however, De Guindos has been cautious It is important to monitor the development of the forecasts and how interest rate increases are transmitted to financial markets.
Look at the economy
In addition, the ECB Vice President rejected criticism from those who oppose interest rate increases to make mortgages more expensive, saying inflation is the “greater evil” for citizens with “low incomes” as it reduces their purchasing power. “If we did nothing, we would basically see that inflation would skyrocket, there would immediately be completely crazy inflation expectations,” he assured.
The executive has admitted that the first half of the The Spanish economy is “relatively good” However, the second quarter was “weaker” in line with the rest of the European economy, as is also the case in Germany. Nevertheless, he noted that the Spanish economy is not doing well at the moment “very competitive”, due to its export component and has a healthy banking system.