Government bond yields will rise across the eurozone on Tuesday, as the European Central Bank (ECB) is expected to tighten monetary policy longer and more aggressively. The Belgian 10-year interest rate rose by eight basis points Tuesday morning, to 3.24%. This is the highest level since the spring of 2012.
France and Spain saw an unexpected surge in inflation in February, so for the first time traders expect the European Central Bank to raise deposit rates to 4 percent by February next year, the financial news agency reports. bloomberg. Previously, the peak rate was supposed to be 3.5 percent this year.
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A deposit rate of four percent means interest rates are higher than they have been in the last twenty years. The European Central Bank is expected to raise its new interest rate from 25 to 50 basis points in May.
These expectations have led to higher long-term interest rates across the Eurozone. Italy’s 10-year interest rate rose 11 basis points to more than 4.5 per cent. The Belgian ten-year interest rate, in turn, is close to 3.25 per cent.
High interest rates are bad news for borrowers and the Belgian treasury.
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