The six and 12-month Euribor rates rose this Wednesday to new highs since November and August 2024, respectively, settling at 2.800% and 3.138%. In the opposite direction, the three-month Euribor fell to 2.626%. These rates are calculated from the average of the rates at which 21 banks in the euro zone lend money to each other in the interbank market. The six-month rate has become the most used in Portugal for variable rate housing loans since January 2024, representing 39.87% of permanent primary residence loan stock, according to data from the Bank of Portugal for July.
The Governing Council of the European Central Bank meets this Wednesday and Thursday in Berlin, Germany, to decide on the monetary policy of the euro area. Analysts estimate that the ECB should announce on Thursday a new increase in key interest rates by 25 basis points, to the upper bound of the neutral zone. This meeting follows the ECB's unanimous decision in July to maintain rates, after having raised in June, for the first time since then, all three key rates by 0.25 percentage points.
The June increase aimed to respond to the rise in global prices caused by the Middle East conflict. Following that meeting, the ECB President, Christine Lagarde, stated that in September the bank would have more data to make the decision on rates and that it would be possible to raise them at the meeting that began this Wednesday.
