The European Central Bank (ECB) faces the traditional monetary policy meeting after the return of the summer holidays. The market estimates that it will raise interest rates by 25 basis points, until placing the deposit facility - the reference rate of money - at 2.5%, the highest since March 2025. Unless there is a change of script or a sharper increase than expected, the focus is on updating the economic forecasts and on the messages that the president of the organization, Christine Lagarde, can send as clues about what the entity will do in the short term. term. It depends on them whether financing will be more expensive for the rest of the year. From mortgages to consumer loans or the loan that a small entrepreneur is going to request for his business.
The new exchange of attacks between the United States and Iran after the blockage in peace negotiations does not help to moderate the rise in prices. The eurozone CPI closed August with an increase of 3.3%, driven by energy. The rise in oil prices in recent weeks suggests that the inflationary spiral could continue. Some analysis houses go a step further and have ventured to anticipate that the ECB will also approve another rate increase before the end of the year, expectedly in December.
Persistent inflationary risks and energy prices would support this move, argue JP Morgan and BNP Paribas. Both managers agree in showing their concern about second-round effects, a phenomenon that occurs when inflation spreads to other parts of the economy and salaries when price increases remain high for a long time. The Governor of the Central Bank of Lithuania, Gediminas Šimkus, joins this trend, who has recently assured that the possible increase on Thursday will not be enough for inflation to return to the 2% objective.
"The most hawkish members such as Isabel Schnabel or Philip Lane have expressed their concern about inflation levels, and have stressed the need to maintain a slightly restrictive monetary policy to fight against the negative evolution of prices derived from high energy costs," explains the head of fixed income at Ibercaja Gestión, Cristina Gavín Moreno, who also give a high probability that the rate will reach 2.75% in the last meeting of the year.
Bank of America (BofA) admits that although there is a risk of another rise before the end of the year, they maintain as a central scenario that this cycle of monetary tightening will close in September. "It is difficult to adopt a very aggressive tone when the shock increasingly resembles a traditional energy shock and much less like what we saw in 2022," says Rubén Segura-Cayuela, chief economist for Europe at the American giant.
Since last March, it has revised the growth forecast downwards twice and has worsened the inflation forecast. The reference scenario on average for June contemplates a growth of 0.8% in 2026, 1.2% in 2027 and 1.5% in 2028. In practice it implies a reduction with respect to the 0.9% and 1.3% that was anticipated for 2026 and 2027, respectively, while it improves by one tenth the following year. In contrast, it now foresees a CPI of 3% for 2026, four tenths more; 2.3% in 2027 (three tenths more) and 2% in 2028, compared to the 2.1% projected a few months ago.
The effect of another increase at the end of the year would begin to be noticed
The Euribor, the reference indicator of the mortgage market and which usually captures movements in advance, closed August at 2.954%, its highest level in two years. The trend has been consolidated in the first days of September after this indicator has exceeded 3.1%. In practice, this implies that a family that has to review an average 25-year mortgage of 150,000 euros with a spread of one point using the August data will pay about 774 euros more per year, around 64.5 euros more per month. If it were semiannual, the fee would increase by around 56.5 euros, 678 more annually.
