analysis of the family economy

The return of summer is difficult for many families from an economic point of view. To the costs of going back to school we must add the increase in prices for, for example, food, electricity, fuel and the mortgage. Spending is on the rise and the question for many is: will this stop or will it start to decline soon?

Let’s analyze it in parts. To mortgagesExperts do not consider a decline likely in the coming months. The Euribor, the reference rate used for most variable-rate mortgages, has been rising for a year and a half and ended September at almost 4.15%, hovering around the highest level since November 2008.

In the summer there was speculation that the ECB could stop interest rate increases and that this would also slow down the Euribor. However, in mid-September it decided to raise interest rates again by 0.25% to 4.5%, which was a shock to the Euribor, which continues to rise.

The economist Endika Alabort explains that the ECB has implemented these interest rate increases to reduce inflation, i.e. price increases. However, he understands that he is not achieving it and that he must change his strategy. In this sense, predicts that it may stop raising rates and that this could have an impact on the Euribor in the medium term.

Mortgage payments are not the only ones showing an upward trend. The fuels They have also increased their prices during the summer months. Specifically, the gas has accumulated an increase in costs 10.5% since the beginning of July. It currently stands at 1,759 euros per liter, the highest price since November 2022 and at that time the 20 cents per liter bonus introduced by the Spanish government was still in force. The price of diesel oil has risen even further in recent weeks 17% since the beginning of July.

This upward trend in prices is mainly caused by the increase in oil prices, although it is also necessary to take into account the evolution of crude oil, taxes, logistics, etc. In fact, the price of crude oil does not directly translate in prices. For example, a barrel of Brent ended the day at $95.14 last Thursday, September 28, while on July 3 it did so at $74.93, indicating that prices may continue to rise.

Alabort believes that in this case the price of fossil fuels will not fall in the long term, because its existence is becoming less and less. However, the focus is also placed on OPEC, which determines how much oil it produces over a given period, which influences the final price.

Another of the big family expenses is usually supermarket shopping and this too has given no respite during the past year. The Organization of Consumers and Users (OCU) published a report last Thursday in which it stated that the basket of The purchase has become more expensive by 14.1% in the last year.

Oil, sugar, rice, potatoes… There are many foodstuffs whose prices have risen in the past year. If fuel and energy prices continue to rise and the drought does not give agriculture a respite, it does not initially appear that they will fall in the medium term. But according to Alabort, that is not the only factor in the price increase. According to him, many distribution companies have passed this increase directly on to consumers.

In conclusion, the economist believes that a structural change of the entire system is necessary to change these trends and that governments cannot strongly influence prices with the measures taken so far.