The 12-month Euribor hit 3% in its daily evolution this Monday. a level not recorded since December 2008, According to data consulted by Europa Press.
However, with today’s data Euribor’s monthly average is 2.8%, to remain below 3% at the end of the year.
During December, the index referring to the most volatile mortgages in Spain was around 2.8%. But after the last meeting of the European Central Bank (ECB) last Thursday, the indicator has already recorded two days above this level. Special, It climbed to 2,993% on Friday and is stuck at 3,057% today.
The ECB decided to increase interest rates at its last meeting of the year. 50 basis points up to 2.5%. Despite showing some moderation from the previous two 75 basis points gains, the central bank announced on the same day that rates should continue to rise “significantly” and steadily until they reach sufficiently restrictive levels to allow prices to bounce back. . achieve the 2% target in the medium term.
“paralysis” in November
These increases came after Euribor stalled at 2.8% in November. They explain from HelpMyCash that this “paralysis” is due to three factors: on the one hand, in November, the index was already almost one point above interest rates; experts speculate with moderation in the ECB’s growth rates; and finally, inflation in Europe has decreased.
“As long as the ECB aims to reduce inflation to at least 5% in November, Eurozone CPI fell to 10.1%— will have to keep raising interest rates. Of course, we assume that this will not be the sudden and aggressive rise we have experienced in recent months, but a much calmer and slower rise,” says Olivia Feldman, co-founder of the financial comparison company.
One of the reasons why the ECB is expected to control its increases is not to harm the economies of eurozone countries. “Monetary authority has a complex role to play. It must balance between reducing inflation and avoiding embarrassing the most indebted countries. That’s why we insist on believing it. will be prudent and raise policy rates by about one more percentage point for the next 12 months,” adds the expert.
In this way, he believes that the rates will reach 3% in the first six months of 2023, which will cause Euribor. It reached 3.5% in June.