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After a decade of negative rates, the European Central Bank is preparing to raise its key rates from July. The objective is to contain the rise in prices. What consequences will these measures have on loans?
For the first time in ten years, the Central Bank will tighten access to money by raising rates. Since 2011, the ECB has been applying low rates to shower Europe with money and promote growth but this tends to raise prices. It will therefore raise rates so that there is less money on the markets and slow down inflation. Christine Lagarde, President of the BCE warnsit will not have an immediate effect, “but in the medium term” this could make it possible to achieve the objective of inflation at 2%.
The banks will therefore also increase their interest rates when applying for credit to the detriment of the French. “We could land by the end of the year at a 20-year average rate of 2%”says Cécile Roquelaure, spokesperson for loans. To repay its debt, France also borrows. The increase will therefore have an impact on his debts as well. “It will imply that the government will have to make a little more acute spending arbitrations”indicates Natacha VallaDean of the School of Management.
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