Remortgaging and refinancing in Spain

In the last episode I commented on how dangerous the inaction by the Bank of England regarding interest rates in the face of rapidly rising inflation. Further confirmation was given by the data for Spain in October, with inflation accelerating at tyre-screeching pace of 5.5% overall. At the base of this were energy prices, which were also transferred to food, heating, and rental costs (especially rentals in the south of Spain). This value for Spain was the biggest increase since 1992, when the old peseta was under pressure by the strong Deutsch Mark. The inflation rate would have been much higher were it not for a reduction of energy taxes by the government. Yet another indication that higher interest rates *will* be coming, as the central banks will not have any other choice - or risk blowing everyone's savings up.

Having said that, the recent scare of the new Omicron variant has caused a big 12% drop in oil price in the markets, which might provide temporary relief to consumers and central banks alike. This would be a very strange phenomenon, a record high inflation rise, followed by record high drop.... Nevertheless, oil prices in the markets are famous for being volatile, so my bet is that interest rates will in fact rise anyway by 2nd quarter of 2022. Mark this post to see how well it will age :-)