The recent surge in residential property prices in Belgium after many decades of more or less continuous increases has reignited concerns over the affordability of home ownership for households. Although household disposable income has risen constantly for just over two decades, it has been outpaced by rising dwelling prices over the same period. Housing has not become correspondingly less affordable because mortgage interest rates have fallen significantly during that time, enhancing households’ ability to borrow.

The European Central Bank’s Governing Council has taken further key steps to steer inflation back to its 2% target over the medium term. The Governing Council decided to raise the ECB’s three key interest rates by 50 basis points and also approved the Transmission Protection Instrument (TPI).

There was a loss of confidence in all sectors of activity surveyed, with the exception of the manufacturing industry. After the sharp recovery in April, the production capacity utilisation rate in the manufacturing industry has dropped back a little.

After three consecutive months on the rise, the consumer confidence indicator has fallen back a little in July. The loss of confidence is mainly attributable to a deterioration of the outlook for the general economic situation.