More expensive mortgages and loans for households, more expensive credit for businesses, rising government bond yields and market tension: the effects of the ECB’s decisions will be felt immediately, which in July, in addition to closing the purchase program of bonds, after eleven years it will also proceed with the first rate hike of 25 basis points, followed in September by a new hike of 50 points.
Below are the main consequences destined to condition the decisions of savers and investors.

MORTGAGES GO UP. The era of almost zero-cost mortgages is over.
Those asking for a new loan have already noticed this in recent months and have been offered a higher rate than those granted last year. In view of the Frankfurt squeeze, announced for months, the market has in fact prepared itself and the banks have begun to charge savers the costs of money that will be more expensive from July. Variable-rate mortgages will suffer the most immediate effect: the installments will rise from July. Obviously, personal loans or the payment in installments will also be more expensive.

MORE EXPENSIVE LOANS FOR BUSINESSES. Up to now, companies, especially SMEs, have had a simpler life thanks to loans at very low rates, in some cases obtained with state guarantees and with extended maturities thanks to the moratoriums introduced by the government to mitigate the effects of Covid on the economy. From July the whole operation will be more expensive, because the loan installments will be higher. And it is not certain that the state moratoriums will be renewed. Furthermore, the decisions of the ECB will not immediately mitigate the inflation race, leaving companies with the problem of high prices which, not always being able to pass on to the final consumer, lead to lower earnings.

REDEMPTIONS OF INCREASING GOVERNMENT SECURITIES. Hot months are expected on the debt front: the ECB announcement immediately hit redemptions and the Italian 10-year BTP jumped by 15 basis points, exceeding the 3.5% quota and updating the maximum since 2018. The spread rose to 216 points, reaching the highest levels since 2020. In essence, Italian debt will cost more and if on the one hand investors will have higher coupons, on the other hand the risks of holding up the country that has the second highest debt are rekindled of the euro zone and that from July will no longer be able to count on bulk purchases from Frankfurt.

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