The year 2022 has not been a truce for the budget of families, who are increasingly struggling to meet their financial commitments, while they see their purchasing power drastically reduced. The rise in prices and the cost of living through the increase in inflation, whose growing and systematic evolution the European Central Bank (ECB) seeks to contain through the increase of reference rates, especially the Euribor rate, has caused apprehension and some incredulity on the part of specialists who consider that in this way, families are being punished on two fronts: in the loss of effective net income, together with the increase in the value of their fixed monthly expenses.
But there is no point in ignoring a reality that is here to stay and that will continue to be fed by the conflict in Ukraine, with its consequences on a world economy that is already weak and trying to recover from the strong impact caused by the pandemic, with long-term consequences that are yet to be determined.
In the midst of this economic turmoil are families trying at all costs to meet their responsibilities. If for the ECB the measures taken during this second semester are aimed at containing the harmful consequences that an uncontrolled rise in inflation would have on the world economy, for families it is a daily struggle to ensure their own future.
The OECD believes that interest rates will reach 4% already in 2023. If this happens, mortgage payments will rise brutally, and Euribor rates may reach the 5% level, as has already happened in the past. In this sense, Christine Lagarde, president of the ECB, continues to defend what she considers to be its main mission, which is written into the European treaties and which involves guaranteeing price stability.
With this measure, Lagarde argues that her objective is in no way to limit or reduce economic growth, but it is imperative to bring inflation down from the current almost 9% to 2%. In view of the objective outlined and assumed, everyone's expectation is only on how much interest rates will rise, with the Organisation for Economic Cooperation and Development (OECD) already defending a forecast, at this time, of a rise in rates up to 4% as early as 2023: "in the euro area, the ECB faces a challenging environment, given the prospects in the face of increasingly widespread inflationary pressures".
Rates at 4% only twice since 1999
If the OECD scenario comes true, it will be only the third time since 1999 that the ECB has set interest rates at the 4% level. The first was in 2000, at a time when the ECB began raising its main key rate a year earlier, from 2.5% to 3%, and in October 2000 rates reached 4.75%, remaining above 4% until September 2001.
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