Belgian interest rates have started to rise again in recent days, following a fall caused by Russia’s invasion of Ukraine. On Monday morning, long-term interest rates rose to roughly 0.87 percent. That’s the highest it’s been since the fall of 2018.
Home loans became more expensive as interest rates rose. It’s also bad news for the Treasury, which risks paying more in the long term if Belgium borrows money on overseas markets.
The rise in interest rates is linked to the European Central Bank’s decision that it will tighten monetary policy in order to combat excessive inflation.
The era of ultra-low government bond interest rates is long gone. Belgian long-term interest rates went below zero for a long period as a result of the corona pandemic. With a negative interest rate, investors put money in, causing our Treasury to owe less than the amount borrowed. The lowest point was about -0.440 percent in November 2020, when the Belgian ten-year interest rate was around that level. However, from December 2021, opinion has shifted: Belgian long-term interest rates have returned to positive territory and will continue to increase steadily, with a little respite owing to the Ukraine crisis.