Please find below a selection of news and information relating to the Euribor interest rate, the main reference point for Spanish mortgages.

For the latest rates, updated daily, click here.


2nd Jan 2009, from the Belfast Telegraph.

Speculation mounts of cut in EU interest rate

Speculation was mounting today that a cut in European interest rates was imminent.
It follows comments from European Central Bank president Jean-Claude Trichet.
If ECB moves to reduce rates it should bring down the value of the euro, which is almost at parity with sterling.
The euro soared by over 32% against the pound last year, which recorded its worst yearly performance against the euro since the single currency’s inception a decade ago.
The current interest rate in the Eurozone is 2.5% compared to the Bank of England base rate of 2%.
The ECB, which has its headquarters in Frankfurt, is due to meet on January 15.
Mr Trichet, who has stressed that inflation should not fall much below 2%, has hinted at a January interest rate cut.
“We are concentrating at present on the impact of our previous decisions,” said the ECB chief in an interview with the German financial daily Boersen Zeitung.
He added: “I always stress, we are never pre-committed and we always do what is necessary to solidly anchor inflationary expectations in the medium term.”
Several bank directors and governors, including Mr Trichet, have sought to dampen such speculation, but with inflation falling much faster then expected, the threat of deflation has recently begun to surface.
His comments came as new figures showed loans to households and companies in the euro area slowed for the 11th month in succession after banks tightened credit standards.
Private sector lending rose 7.1% in November after an increase of 7.8% in October, the European Central Bank said. That's the lowest level in four years.
M3 money supply, which the ECB uses as a gauge of future inflation, slowed to 7.8% from a year earlier as demand for the most liquid assets retreated.
Economists had expected the rate to decelerate to 8.5% from 8.7% in October, the median of 28 forecasts in a Bloomberg News survey shows.
The euro-area economy is fighting its first recession in 15 years and the Eurosystem staff expects growth to contract in 2009.
Retreating commodity prices and easing inflation pressure allowed the ECB to lower borrowing costs by a total of 175 basis points since early October, and more rate cuts may follow as early as January.
“The ECB will continue to watch money-supply growth, but it is aware of the fact that we're seeing safe-haven and portfolio effects,” said Michael Schubert, an economist at Commerzbank AG in Frankfurt.
“Policy makers don't care about investment shifts. They'll look at the availability of loans and there we have to fear a crunch.”
Credit standards for loans to companies tightened “significantly” in the third quarter and should remain “broadly unchanged” in the final three months of 2008, the ECB said in its latest quarterly bank lending survey.
Meanwhile, the euro interbank offered rate, or Euribor, that banks charge each other for three-month loans, fell this week to its lowest level since May 31, 2006, according to data from the European Banking Federation.



15th December 2008

An article about the Euribor, from Hemscott.

Euribor rates continue two-month slide
FRANKFURT, Dec 15 (Reuters) - Euribor euro bank-to-bank lending rates fell on Monday, as one-week, three and six-month rates all continue to sink towards the European Central Bank's benchmark rate of 2.5 percent.
The three-month Euribor rate, traditionally seen as the main gauge of the interbank euro lending market, hit a new two-year low as it fell to 3.243 percent from 3.282 percent, the lowest since August 2006.
The one-week equivalent fell to 2.427 percent from 2.441 percent, while the six-month rate, which had risen to 14-year highs in early October, fell to 3.334
percent from 3.369 percent, the lowest since Aug. 1 2006.
ECB interest rate cuts and changes made to lending rules have helped bring bank-to-bank rates down from historic highs in recent months.
But the spreads between official and interbank rates are still stretched, banks remain reluctant to lend over longer periods and deal volumes are low.
The ECB's main rate is now 2.5 percent. The bank slashed the rate by a record 75 basis points on Dec. 4. and has cut it by 175 basis points since October.
It has also recently scrapped limits on the amount banks can borrow at its auctions and lowered the quality of collateral it accepts to make it easier for banks to borrow from its cash pools.
Euribor rates are fixed daily by the Banking Federation of the European Union (FBE) shortly after 1000 GMT.
Three-month rates form a benchmark for much short-term commercial lending in Europe, and one-week rates give an indication of banks' very short term financing conditions.


3rd December 2008

Latest Euribor rates - the most commonly used reference for Spanish mortgage interest rates, continue to fall (see below)2 December 2008

Current Euribor rates
period 12-03-2008 12-02-2008 12-01-2008
1 month 3.416% 3.471% 3.523%
3 months 3.743% 3.786% 3.816%
6 months 3.787% 3.828% 3.859%
12 months 3.853% 3.896% 3.921%



At close of business yesterday the 12 month Euribor rate was 3.921%, and the 3 month rate was 3.816%. ECB base rates are currently 3.25% but are widely expected to reduce further this week. Spanish mortgages are normally based on either the 12 month or 3 month Euribor rates.


Euribor Interest Rate.

The European Central Bank benchmark rate is set monthly, much in the same way as the MPC meet to discuss interest rates in the UK. The benchmark rate is set by the ECB and is the rate at which prime banks in the Euro zone can borrow funds centrally. The Euribor rate is the inter-bank rate, ie the rate at which prime banks lend to each other. Recently this has been at an all time high as banks have been uncertain of lending to each other.

Movements in the Euro zone interest rates have become high profile during the recent credit crunch, and can have a significant bearing on clients with existing mortgages in the Euro zone, and also for clients hoping to purchase properties with mortgages in Spain and the Euro zone.

On this page we will be publishing news and forecasts that relate to the Euribor interest rate, and forecasts for the Euro zone economy.



Monday August 4th 2008

Spain's Year-End Inflation Could Be 4%

MADRID (Dow Jones)--Annual inflation in Spain could end the year at 4% if there's no "new surprises with the oil price," Economy Minister Pedro Solbes said Monday.

Spanish annual inflation, as measured in preliminary data of the European Union harmonized index of consumer prices, accelerated to 5.3% in July from 5.1% in June, Spain's National Statistics Institute, or INE, said Thursday.

A decline in oil prices in recent weeks should be noticeable in August inflation figures, Solbes added, speaking in an interview with the Radio Nacional de Espana radio station.

Both inflation and the Euribor reference lending rate could be touching a ceiling, Solbes also said.

The Euribor rate for 12 months rose to 5.359% Monday from 5.357% previously. Most Spanish mortgage owners pay the Euribor plus a certain rate.

Solbes also said the government doesn't think Spain will enter an economic recession, although he admitted that you can never rule out anything.

The minister expects a recovery possibly starting in the second half of 2009, although in an interview published in the El Pais newspaper Sunday, Solbes said the economic slowdown has been worse than expected.

Spanish economic growth continued to slow sharply in the second quarter, amid a sharp correction in consumption and higher unemployment.

The country´s central bank estimates that Spain´s gross domestic product growth slowed to 1.8% on the year in the second quarter, from 2.7% in the previous quarter, as global financial turmoil exacerbated the steep cyclical downturn already underway