Euribor, the benchmark used to reference most variable rate mortgages in Spain, climbed again this Monday. It marked the highest daily reading since April 2012, signaling expectations that the European Central Bank may raise rates at its September meeting. The move reflects persistent price pressures and a market that is recalibrating its outlook for policy in the euro area as inflation remains stubbornly elevated in the region.
With inflation running well above target in July, traders are increasingly pricing in another 50 basis point increase from the central bank. The eurozone already reported a record 8.9% inflation rate, underscoring why markets expect the ECB to continue tightening.
Analysts note this would be the second consecutive 50 basis point hike after the ECB surprised markets with a 50 basis point lift at the July gathering. As a result, financing rates linked to Euribor have moved in tandem, influencing wholesale funding costs and the rates that banks charge for variable-rate loans. The refinancing rate stood around 0.50%, the deposit facility remained at 0.00%, and the marginal lending facility touched modestly higher levels, shaping the overall cost of borrowing for households and businesses.
Against this backdrop, the Euribor is tracking a monthly average near 1.125% as August approaches its close. If the month ends higher, it could cross about 1.22%, reaching its loftiest level since mid-2012.
The upward drift in Euribor continues a pattern seen last week, when the index rallied to 1.258% on Friday, August 22, after posting 1.18% on Tuesday, August 16. This sequence reinforces the sense that lenders are pricing in tighter policy for a longer period, which has implications for mortgage renewals, refinancing decisions, and consumer finance in both Spain and the wider euro area.