The Euribors continue to move higher at the start of the week in all its main terms, after the warnings issued in the last hours by the president of the European Central Bank (ECB), Christine Lagarde, and the institution’s chief economist, Philip lane. Both have warned of a “next short-term subjacent inflation rebound” that will force the central bank to extend the cycle of interest rate hikes to May once it places them at 3.5% on Thursday, March 16.
Specifically, the 12-month Euribor, the index most used to set the cost of mortgages in Spain, shot up today, Monday, March 6, to 3.859%, plus 3.3 basis points more than on Friday and its highest level. high since December 3, 2008. 75% of active loans for home purchase continue to be referenced to that indicator.
In monthly terms, the average for February closed at 3.53% but after the first sessions in March it is raising its monthly price above 3.8%, which represents a year-on-year jump of more than 400 basis points or 4 percentage points. It is the largest in history.
In the six-month term, also used as a reference for mortgages and other loans, the Euribor rate has risen today to 3.363%, while the 3-month index -used mainly as an anchor for corporate loans and a ceiling for deposits- the indicator has risen to 2.875%.
The Euribor began to rise on February 4, 2022, when Christine Lagarde did not rule out raising rates in 2022, although she limited it as a distant possibility. What happened next appeared until the central bank itself, which was forced to confirm a month later that it would raise the price of money at some point, something that did not happen in Europe until July, three months after the Fed and other monetary authorities begin to raise theirs.
Inflationary pressures that began in mid-2021 were exacerbated by Russia’s war in Ukraine. Despite the fact that headline inflation (CPI) has begun to take downward steps, core inflation continues to grow and in countries like Spain it stands at 7.7%, its highest level in 40 years.
On February 2, the ECB again raised rates by 50 basis points, an increase equal to that made on December 15, when the rate of increases began to slow down compared to the 75 basis points that the rate was raised at meetings. from October 27 to September 8.
