October 3, 2022

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After the bills, mortgages are now also in jeopardy

European Central Bank Unanimously decided to raise the three interest rates again Reference: what’s going on.

Less than two months after the first increase of 50 basis points, the first since 2011 (in conjunction with Mario Draghi’s farewell to the government), yesterday, European Central Bank Unanimously decided to raise the three interest rates again from ref. this time 75 basis points, The highest level ever implemented by the institute, bringing the total to 1.25.

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And if, as Eurotower revealed, the goal is to “ensure a timely return of inflation to our 2% target,” at the same time the economic and monetary consequences of this new surge are different: from the immediate reactions of markets – currently positive – even mortgages. Real estate, loans and spreads. But let’s go in order.

European Central Bank raises interest rates: fear of inflation

Yesterday, the European Central Bank decided to raise the three interest rates by 75 basis points. An almost “desperate” move against the persistent increase in inflation. And maybe even “reformist”, because it shows that the previous 50 basis point rally (not even two months ago) might not have been up to the point. To the extent that the institute itself stated that it “expects another increase in interest rates in upcoming meetings to curb demand and protect against the risk of a further increase in expected inflation,” the decision followed Eurostat’s quick estimate that inflation stood at 9.1% in August. Also given the fact that “the increases in the prices of energy and food commodities, demand pressures in some sectors due to the reopening of economic activities and supply bottlenecks remain among the factors responsible for the increase in inflation.” And it could still go up. Based on these decisions, ECB experts predict that the inflation rate will be 8.1% in 2022, 5.5% in 2023 and 2.3% in 2024. As of September 14, interest rates will be raised on re-runs. The main funding to 1.25% on the marginal lending facility to 1.50% and on deposits with the central bank 0.75%. Figures and analysis are dictated by forbes.it

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current situation

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According to the data, the European Central Bank has high expectations for the eurozone The slowdown in the economy, which should see a recession later in the year and in the first quarter of 2023. Both because of the cost of energy that “reduces the purchasing power of household income,” and because of the adverse geopolitical situation that “has implications for business and consumer confidence.” This is evidenced by the fact that in the latest forecasts formulated by experts for economic growth, there is a noticeable downward revision for the remainder of this year and for the whole of 2023, settling at 3.1% in 2022, at 0, 9% in 2023 and 1.9% in 2024.