While the six-month Euribor, which is the interest rate for most Estonian home loans, had fallen to 3.83 percent by the beginning of February, it has now risen above 3.9 percent. The 12-month Euribor has risen from 3.5 percent to over 3.7 percent during the same time frame.

Tuesday's "Aktuaalne kaamera" asked the expert for their thoughts on the situation.

"Interest expectations have changed. While earlier this month the European Central Bank was expected to cut interest rates six times over the year, expectations have now fallen to four," said SEB Bank capital markets broker Erik Laur.

"Additionally, if it was thought that the interest rate reduction could start as early as March, at the moment these expectations have been postponed much further to June and may even be postponed again," he added.

Financial advisory firm Redgate Capital Partner Valeria Kiisk said: "Market participants have overestimated the speed at which the Euribor will be lowered. The market expectation was not quite right. It is certainly seen that, yes, inflation has not been brought under control quickly, but how sustainable this fall is now, it is not known."

Bank of Estonia Economist Peeter Luikmel said cuts will not start until the summer and may be lower than anticipated.

The pace is probably no longer 0.5 percentage points at a time, but 0.25. And these cuts will perhaps not reach very low levels, because we are actually still living in a period where inflation will remain well above 2 percent in the euro area for quite some time to come. A year and a half for sure," he said.

The euro area economy has coped quite well with high interest rates and unemployment has not risen significantly. This pressure to raise salaries will also remain.

"Perhaps the main source of concern is no longer aggregate inflation, with energy and food prices, which have fallen slightly recently, but rather the rise in domestic prices, i.e. the service sector and domestic consumption, driven by wage growth. This has been a concern for some time and the low level of unemployment suggests that wage increases may come in higher than expected," Luikmel explained.

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