The environment of high inflation and types interest rate continues to impact the savings of homes. The money deposited by Spanish families in current accounts was reduced to 848,975 million of euros in October. The drop compared to September was 13,258 millionthe second largest since the Bank of Spain began to measure it in 1997 and just slightly lower than last January (13,496 million). In relative terms, the monthly decrease was 1.53%the highest since the one that occurred in July 2012in the midst of the debt crisis and barely a month after Rajoy’s Government requested the european bailout for Spanish banks (-2.2%).
The reasons for the current reduction, however, are very different. On the one hand, households are drawing on their savings to face the brutal increase in price of the prices of your consumption basket of the last two years. On the other hand, those who can afford it are mobilizing part of their money to face the loss of purchasing power what high inflation means to them. Thus, the average account rate currents has barely risen from 0.02% in December 2021 (when the European Central Bank began to tighten monetary policy) to 0.13% last October, compared to an inflation that stands at 3.2% according to November data released this Wednesday.
The moderate increase in the interest that banks pay on deposits In recent months, in fact, it has been capturing part of that money that comes out of checking accounts. The rate of new term deposits, thus, stood during the three summer months around 23%insufficient to gain purchasing power but much higher than the 0.06% at the end of 2021. Consequently, the balance of deposits increased in October by 6,410 million and 6.3%, up to 108,392 million. This increase limited the decrease in the money that families had saved – between accounts and deposits – in banks last month to 6,840 million, down to 957,451 million, 0.7% less than in September.
The ECB insists
Precisely, the vice president of ECB, Luis de Guindoshas once again insisted this Wednesday on urging banks to raise remuneration who pay their clients for “savings accounts” to make savings more attractive, reduce demand and, with it, inflation. “In some countries, banks are quick to adjust interest rates on deposits, and in others, such as Spain, they are falling behind. Eurozone banking sectors also differ in the way mortgage loans are granted, whether at variable or fixed interest rates. He strengthening profitability was particularly notable in banks in countries where variable rate lending and the transfer of higher monetary policy rates to lower deposits has been slower“, he noted in an interview with ‘De Standaard’ and ‘La Libre Belgique’.
Not all of the 6,840 million in which the funds kept by families in banks were reduced were presumably used to face the impact of the increase in the prices of the products and services consumed by households. Families, thus, closed September with 21,352 million invested in Treasure letters, 1,004 million more than in August, and it is more than likely that in October they continued to increase their investment in that short-term public debt, better remunerated than bank deposits. They also increased their investment in companies of the IBEX 35 in the last month of summer. And they are also increasing their investment in money (5,163 million in the first semester) and insurance and pensions (1,495 million), as well as paying off your mortgages early to alleviate the impact of the rise in the Euribor.