The interbank market shows signs of slowing down. The Euribor, the index to which most mortgages in Spain are referenced, stagnates at the 4% level during the first full week of September. Specifically, the twelve-month Euribor stands at 4.086% this Friday, very in line with the figure it marked this Thursday (4.078%) and with the weekly average (4.06%) in a sign of paralysis before the meeting of the European Central Bank (ECB) next week, about which there is great uncertainty.
On the table is the GDP data for the eurozone, which remained at 0.1% in the second quarter, the same figure as between January and March. The evolution of activity causes division between those who see stagnation as it is two tenths lower than expected and those who defend that the economy is holding up. The key is in the PMI for services and manufacturing, which show a simultaneous contraction in the eighth month of the year, especially the latter, which suffer their biggest decline since February 2021, standing at 47.9 points, three points below that recorded in July.
The other variable to take into account is inflation, which remains at 5.3% during August, compared to the expectation that it would drop to 5.1%, while the underlying inflation, which excludes fresh food and energy, fell. reduce to 5.3%, in a gradual but slow movement. In these circumstances, the ECB faces a dilemma as to whether to continue with a new rate hike from 4.5% or declare a pause.
In this context, the twelve-month Euribor, which measures the cost at which banks lend to each other for that term, began September with a drop of five tenths to 4.055% in its daily price, which marked its biggest drop in one month. This rate settles at the 4% barrier after experiencing its first decline since the end of 2021 in August.
The behavior could continue until next Thursday, September 14, when the Frankfurt-based body is scheduled to make a decision on interest rates and if it adopts a pause as President Christine Lagarde hinted at at the end of the last meeting, held on July 27. In the minutes of this meeting, the crossroads that the central bank faces in reducing inflation to the 2% objective without overstepping the brakes were made clear.
This week, Lagarde herself apologized at a conference in London for underestimating the vertical advance in prices due to the difficulty of monetary organizations in predicting an advance in uncontrolled prices that ended up triggering the rise in interest rates. . highest in history. At the current time, the eurozone reference rate is 4.25%.
