The two most direct effects of the increase since July in the European Central Bank’s (ECB) key interest rates on the country’s financial conditions are already being felt in the increased credit to the economy and the higher cost of financing public debt.

This week, the 6-month Euribor (most used as a reference for mortgage loans) has already reached over 1.5%, after opening the year in very negative territory (see text on page 16). At the public debt auction, on Wednesday, in the offering of Portuguese 10-year Treasuries, the state had already had to pay investors interest at 2.754%. It was more than one percentage point above the 1.694% rate pushed in April during the joint operation to launch that streak which ends in July 2032. The World Government Bond Financial Gateway (WGB) algorithm forecasts interest in Portuguese 10-year bonds at 3.4% in End of this year, 100 basis points above the cost of German debt financing. Which is equivalent to a 1 percentage point spread, roughly equal to the current ratio. Regarding Portuguese debt issuances already implemented in 2022, the average employment rate has already increased from 0.6% last year to 1.3% at the end of July. more than doubled.

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