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Inflationary Pressures On The ECB To Impact On French Mortgages

Published: 9th September 2013

With the European Central Bank under increasing pressure to control inflation throughout the Euro Zone, it is looking increasingly likely that property owners in France will experience increased mortgage rates in the coming months. With the European central bank increasing rates to 1.25% recently (up from 1%), it is inevitable that the rate rises will be passed on to borrowers within a matter of weeks. At present, borrowers are still benefiting from the fact that the interest rate rises had already been factored in by the banks, however with fixed rates increasing it is likely further increases will occur in the coming weeks.

The European Central Bank had set of inflationary target of 2% to the current period, however with inflation throughout the Eurozone currently running at 2.8% many experts are predicting further interest rate rises in the coming weeks. Initially, consensus was around an interest rate rise in July, however the recent figures and increased inflationary pressures looks set to see an announcement on interest rates sooner rather than later. Current estimates suggest that inflation is set to plateau at around 3% in the coming months as the strong growth in Germany and throughout much of Europe begins to peak.

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