The interest rates they go back up. The inflation runaway has forced the ECB to raise rates for the first time in 11 years to tackle a situation that can take the European economy ahead and that is already affecting many countries.
Will be an increase of 0.25% from July and there will be another in September of the same proportion is expected. Something that is expected is that this situation harms investment, and it is the banks that have anticipated it with a measure that has not been seen for a few years.
The entities they are going to stop charging large companies and customers institutional for your deposits. Until now it was applied 0.2% charge for that surplus liquidity that the banks have deposited and that the ECB charges them.
Come on, that he transferred that cost to them with the aim that use that liquidity to invest. But from now on you will not charge them anything, why? Because the banks are not going to be charged either, and this can harm the investment. Even more than what is already happening.
No incentives to invest
Banks had been charging this deposit rate to large companies and clients with the clear objective of making them invest. If they had money standing they were ‘penalized’so it was better to have it reversed.
But now – it will be from the fourth quarter – they are not going to be charged for having their money stopped. Therefore, investment is discouraged and, taking into account these times and how difficult it is to save, many companies will prefer to have their money safely stored.
Also, right now the markets are very choppy and profitability is more difficult to achieve, so many will think that it is better to have a bird in the hand, leaving the money in the bank.
Another important point is that housing is once again the star value. And to acquire one you need a good cushion of cash for entry, something that encourages more savings than investment.
Therefore, bad times are coming for the markets. Many walk away from a very uncertain panorama in which the echoes of the financial crisis are heard from the ECB with something to which we had become unaccustomed but which was our bread for each quarter: interest rate hikes. We’ll see until when.