Rates ease for now, but uncertainty remains
Markets expect another ECB rate hike in December. Short-term rates are the first to respond.
The average 10-year rate dipped slightly last week. Any declines will stay small while inflation remains high.
Long-term rates follow the capital market. A new rise in oil prices could quickly push them up again.
What is happening?
- ECB holds rates at 2.50%. After hikes in June and September, the rate was left unchanged on 29 October. Another hike in December is still on the table.
- Inflation is high. Euro area inflation was 3.8% in September, driven mainly by higher energy prices. In the Netherlands it was 3.0%.
- Geopolitics remains the wild card. The conflict between the US and Iran is keeping oil prices high. A new escalation could push rates up quickly.
- Change at the top of the ECB. President Lagarde is leaving in February, which adds uncertainty to financial markets.
What does this mean for you?
Are you buying a home, or is your fixed-rate period ending soon? On a loan of around €400,000, a rate rise of 0.25% can lower your maximum mortgage by more than €10,000. You can often lock in a rate offer for several months, so you are protected if rates go up. We are happy to calculate what current rates mean for your situation.
This outlook is based on public information from sources including the ECB, Eurostat and lenders’ rate policies. It is an expectation, not a guarantee: rates may develop differently. No rights can be derived from this information, and it is not personal advice.