ING's latest analysis suggests that European government bond yields may need to rise further in 2026 to absorb record issuance, which could have ripple effects across the furniture, home, and interiors sectors.
With a projected €930bn net supply of European government bonds, including €550bn in government issuance and €380bn from the ECB's Quantitative Tightening program, markets will rely on banks, foreign investors, and price-sensitive buyers like investment funds to meet demand.
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Key takeaways for the interiors and furniture industry:
- Borrowing costs may increase: Higher yields on government bonds can push interest rates upward, affecting financing for retailers, property developers, and home improvement projects.
- Banks remain the anchor buyers: Regulatory-driven demand from banks and pension funds may stabilise markets, providing some predictability for commercial lending and mortgages used in furniture and interiors retail.
- Investment funds are price sensitive: Funding availability for large-scale interiors and construction projects could fluctuate with bond yields, influencing project timelines and retail expansion plans.
- Foreign investor trends matter: A shift towards euro-denominated assets may strengthen the euro, affecting import costs for furniture, décor, and raw materials sourced from abroad.
Bottom line
Companies in retail, furniture, and interiors should monitor bond yields and interest rate trends closely. Rising rates may influence consumer financing, commercial loans, and import costs, while also shaping investor confidence in larger projects like home renovations and hospitality interiors.
More information:
ING
www.think.ing.com
