NAC Weekly No. 15: The ECB Lifts Its Deposit Rate to 2.25%

The ECB raised rates for the first time since 2023, lifting its deposit rate to 2.25% as energy pushed euro-area inflation to 3.2%. A day earlier, US inflation reached 4.2%, just ahead of the Fed's 16–17 June meeting. Dubai home values fell for a third straight month, the UK housing market stayed subdued, and Vietnam's central rate edged up to 25,155 dong per dollar.

Market pulse, week of 8–14/6/2026

Signals this week

🇪🇺 Euro area · The ECB raises rates for the first time since 2023

▲2.25%

ECB deposit rate after a quarter-point rise, effective 17 JuneECB, via Banco de España 11 JunPhoto: Dr. Thomas Liptak, Wikimedia Commons, CC BY-SA 4.0

On 11 June the European Central Bank raised all three key rates by a quarter point, according to the decision as republished by the Banco de España. The deposit rate rises to 2.25% and the main refinancing rate to 2.40%. As Cyprus Mail reported, euro-area inflation reached 3.2% in May, with energy up 10.9%. "The war is generating inflation pressures," President Christine Lagarde said. The ECB also cut its 2026 growth forecast to 0.8%.

For Vietnamese investors: euro mortgage rates in Greece, Cyprus or Portugal are unlikely to fall in the coming months. ECB data cited by Cyprus Mail put euro-area mortgage rates at 3.4% in April. Families buying residency-linked property with their own capital are less exposed. Per NAC's listing data, The One in Glyfada, Athens, starts from EUR 281,000 with an estimated gross rental yield of 5%.

🇺🇸 United States · May inflation hits 4.2%, the highest since 2023

▲4.2%

US consumer price inflation in May, year on year; gasoline alone up 40.5%BLS, 10 JunPhoto: Tony Webster, Wikimedia Commons, CC BY 2.0

On 10 June the US Bureau of Labor Statistics reported consumer prices up 4.2% on a year earlier in May, from 3.8% in April. Energy was up 23.5% over the year and gasoline 40.5%. Core inflation, which strips out food and energy, stood at 2.9%. According to VBMA's weekly report, markets were all but certain the Fed would hold at its 16–17 June meeting, the first under Chair Kevin Warsh.

For Vietnamese investors: dollar rates sit at 3.50–3.75%, and the chance of a cut this year keeps shrinking. VBMA also notes that CME FedWatch priced a 68–70% probability of a Fed hike before the end of 2026 after the report. Borrowing in dollar-linked markets such as Dubai and Panama is unlikely to get cheaper, which gives cash buyers a stronger hand in negotiations.

🇻🇳 Vietnam · The central rate rises to 25,155 dong per dollar

▲25,155

dong per US dollar, State Bank central rate on 12 June, up 8 dong on the weekVBMA, weekly report 8–12 JunPhoto: Donald Trung, Wikimedia Commons, CC BY-SA 4.0

According to the Vietnam Bond Market Association's report for 8–12 June, the State Bank set its central rate at 25,155 dong per dollar on 12 June, up 8 dong on the week. Vietcombank sold dollars at 26,412 dong. The overnight interbank rate fell 2.62 percentage points to 3.51%, while the six-month rate rose to 8.38%. The 10-year government bond yielded 4.34%, against 3.15% a year earlier.

For Vietnamese investors: the dong is holding steady, so families moving money abroad for an asset purchase are not yet paying much more in exchange costs. Long-term domestic rates are about 1.2 percentage points higher than a year ago, so borrowing to buy a home in Vietnam has not become cheaper. Residence applications abroad often need funds sent in several tranches, so it pays to schedule currency purchases early.

🇦🇪 UAE · Dubai home values fall for a third straight month

▼−1.2%

Dubai residential values in May versus April; still 2.5% higher than a year earlierValuStrat, via Consultancy-me 11 JunPhoto: giggel, Wikimedia Commons, CC BY 3.0

The ValuStrat Price Index shows Dubai residential values down 1.2% in May, after falls of 1.9% in April and 5.9% in March, Consultancy-me reported on 11 June. Apartment values slipped 0.9% on the month and are 1.4% lower than a year ago. Ready-home transactions fell 55% year on year, though 16 homes still sold for more than AED 30 million, mostly on Palm Jumeirah and in Dubai Hills. ValuStrat reads the slower decline as an early sign of stabilisation.

For Vietnamese investors: cash buyers have more time to choose and to negotiate. Finished homes earn rent from day one, while off-plan needs a close read of the handover schedule. Per NAC's listing data, DAMAC Towers by Paramount in Business Bay was completed in 2019 with an estimated gross yield of 6.5%, and Mercedes-Benz Places is due for handover in Q4 2026.

🇬🇧 United Kingdom · A home sale now takes 21.5 weeks, the longest since 2017

▼−35

RICS house price balance for May: surveyors seeing falls outnumber those seeing rises by 35 pointsRICS, 10 JunPhoto: Acabashi, Wikimedia Commons, CC BY-SA 4.0

The Royal Institution of Chartered Surveyors' May survey, published on 10 June, left the house price balance at −35 for a second month. New buyer enquiries held at −34 and agreed sales at −37, both unchanged from April. The time from listing to completion stretched to 21.5 weeks, the longest since the series began in 2017. "It would be premature to interpret this as the start of a recovery," said Tarrant Parsons, RICS head of market research and analysis.

For Vietnamese investors: buyers hold the bargaining power, while rent expectations climbed to +36, the highest since May 2025. Per NAC's listing data, estimated gross yields are 4.7% at London Dock and 5.2% at Fulham Reach. The Bank of England announces its rate decision on 18 June.

Next week

NAC strategic insight

With both the ECB and the Fed leaning towards higher rates, we favour assets bought with equity, finished or close to handover, in markets where buyers currently have the upper hand, such as Dubai and London. Families who need to borrow should plan for rates staying high through the end of 2026, in euros and in dollars alike. If you'd like to review where your family's portfolio stands after this week, book a consultation with NAC.

Related on NAC

The One Glyfada · DAMAC Towers by Paramount · Mercedes-Benz Places · London Dock · Fulham Reach · The NAC Residence Index

Sources

• Banco de España — ECB raises rates by 25 basis points in June (11 Jun 2026)
• Cyprus Mail — ECB raises rates as Middle East war fuels inflation concerns (11 Jun 2026)
• Euronews — Lagarde defends ECB interest rate hike as robust across three scenarios (11 Jun 2026)
• ECB — Key ECB interest rates (history table)
• BLS — Consumer Price Index, May 2026 (10 Jun 2026)
• Federal Reserve — Open Market Operations, target range changes
• VBMA — Weekly bond and money market report, 8–12 Jun 2026 (Vietnamese)
• Consultancy-me — Dubai property prices edge lower as market signals stabilization (11 Jun 2026)
• RICS — UK Residential Survey, May 2026 (10 Jun 2026)
• Ensonhaber — CBRT holds its policy rate at 37% (11 Jun 2026, Turkish) · CBRT — Inflation data
• Federal Reserve — June 2026 calendar · Bank of England — 2026 MPC dates