Spanish Finance Minister says that interest rates have reached their peak

Pedro Solbes, the Spanish Vice–President and Finance Minister said yesterday that interest rates have reached their peak and are likely to stabilize or even start to drop in the near future.

In an interview with Spanish television channel Antena 3, Solbes admitted that mortgages had risen for those mortgage holders with variable rates and were starting to be more expensive than renting. He insisted that it was abnormal to have to pay more to rent a property than to buy it and that this particular situation was beginning to change.

The Spanish Vice–President also said that despite the international situation regarding mortgages he didn’t foresee any significant changes in the Spanish economy because the government had gone to great lengths to improve inflation, keep the economy healthy and maintained a favourable budget.

Solbes also said that the Spanish economy would continue to grow at the predicted rate.

Solbes indicated that the rate of inflation (IPC) was dropping considerably and was now at 2.2% although he said that next month it could go up once again due to the rise in the cost of petrol, amongst other things. The Finance Minister said that the worldwide demand for cereals together with a very poor crop in Europe (although not in Spain or Portugal) had caused the price of wheat to rise causing, in turn, the much publicised rise in the price of bread and other basics this month. Solbes also added that a similar situation had occurred with milk given that production in Europe had been less than normal while demand had increased.