The average interest rate banks are asking for on mortgages fell back below 3 percent in February, as the market adjusts to a sudden drop in demand. Hospodářské noviny writes that the drop from 3.03 percent to 2.94 percent means mortgages are back at the same level they were in December, at least according to the Czech Statistics Office. HN quotes ING’s chief economist Jakub Seidler as saying the shift illustrates a belief that interest rates across Europe won’t be rising as quickly as anticipated. “Interest rates on mortgages reflect the price of money on financial markets. Capital markets, he said “have lowered their expectations about how quickly central banks will raise interest rates as a result of concern over the development of the global economy.” He said that falling interest rates a side effect of concerns on financial markets about the future direction of the economy. Deloitte’s Roman Lux told the newspaper banks are fighting for market share by reducing their margins.
