The marked increase in the share of household loans with a fixed interest rate currently shields many net borrowers from higher interest rates. At the same time, banks are slow to pass through interest rate increases to deposit rates.
As a result, the aggregate impact of the increase in policy interest rates on household’s net interest income has been fairly limited so far (Slide 14, left-hand side). At the end of last year, the average euro area household has received about € less per year in net interest rate income compared with a year earlier.