New interest rate hikes by the European Central Bank (ECB) later this year.

This change in perspective is already being reflected in Euribor, the benchmark rates used for most housing loans in Portugal, which have shown signs of rising again in recent days. If the conflict continues and puts pressure on energy prices and inflation, the impact could gradually reach the payments made by families to the bank.

According to XTB analyst Vítor Madeira, no change in monetary policy is expected at the ECB meeting on March 18 and 19 (key interest rates are expected to remain unchanged), but a rate hike is expected by the end of the year.

"At this point, markets are already expecting a rate hike by the ECB by the end of the year. A cut was expected, and now a rise is expected; it's completely the opposite," he told Lusa.

This, he explained, is a result of the inflationary consequences of the war in the Middle East, since before the start of the conflict between the United States and Israel with Iran, at least one more drop in basic rates was foreseen by the end of the year.

Energy prices and a weak euro increase inflation
For the president of ActivTrades Europe, Ricardo Evangelista, both the rise in energy prices and the weakening of the euro have an inflationary effect. However, he does not consider it likely that "the ECB will react immediately," but in the coming months and depending on how the conflict unfolds.

"If in the short to medium term there are no prospects for a resolution to the conflict that allow us to anticipate a return to some normality in the Persian Gulf region, it will not be surprising if the central bank raises interest rates, with markets anticipating two increases of 25 basis points before the end of the year," Ricardo Evangelista told Lusa.

Regarding Euribor, he explained that with the ECB's interest rates expected to rise, it is anticipated that Euribor rates will also increase.
Renewal date with different impacts
Deco economist Nuno Rico noted that there has already been "a slight increase in Euribor rates" since the beginning of the conflict, but still limited because there is a "perception that it may be a short-term conflict". However, rates could rise further if the conflict lasts beyond a month.

"Everything depends on whether the conflict prolongs and worsens in the coming weeks," he told Lusa, stating that families should prepare for the impact of the rate increase on the mortgage payment to be paid to the bank.

Even so, there will be differences in the impact depending on the contract renewal date. In the case of families whose contract is reviewed in April, it is likely that they will already feel the impact of the slight increase in Euribor. If, for example, the contract is linked to the 12-month Euribor and was revised in February, the changes will only be felt in February 2027.

Euribor rates have been rising, and this Tuesday the 12-month Euribor (at 2.367%) even reached its highest daily rate since March 2025.

Source: Lusa/Editorial Staff
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