by MrBill » Wed 11 Jun 2008, 02:56:38
Euribor has been creeping up as central banks retreat from rate cuts to help the banking sector weather the credit crisis to a tightening bias to fight inflation.
The ECB has kept rates steady at 4-percent, but has signalled its willingness to raise rates should CPI stay stubbornly high. And it will because the ECB cannot control external inflation caused by excessive money supply creation abroad, so it has limited policy options to fight that imported inflation, especially energy where prices are set globally.
In all honesty, I do not know you from Jack, but if you can afford a fixed rate mortage, go for it. You will not gain much by keeping it floating at this point. Reduce your refinancing risk if you can. I think globally we will see double digit core inflation again before we see a return to the stable lows of the past decade. But do not take my word for it. Talk to your local banker, accountant and lawyer first. Cheers.
The organized state is a wonderful invention whereby everyone can live at someone else's expense.