You are already a British citizen. This will not impact your German nationality (I don't know anything about Spanish Nationality Law):
(1) Prior to 2000, EC nationals were considered 'settled' when exercising Treaty rights in the UK. They did not have to apply for indefinite leave to remain to be considered settled. As you were born in the UK to at least one parent who was exercising Treaty rights in the UK and hence 'settled' for the purposes of the British Nationality Act 1981, you acquired British citizenship automatically at birth. You do not need to, and should not, apply for naturalisation or registration, but instead for confirmation of British citizenship OR a passport (or alternatively, a certificate of entitlement to the right of abode).
NOTE: of course, the situation of EU/EEA nationals in the UK is now different under the 2006 Regulations, implementing Directive 2004/38/EC, which introduced the concept of "permanent residence". There was no equivalent to this at the time of your birth, in 1988, when all EC nationals exercising Treaty rights were 'settled'.
(2) You will not lose your German nationality. First, you are already British anyway, as set out above. Second, the previous answers are all wrong as a point of law. The German 'option model' requires persons born in Germany to non-German parents to decide which citizenship they wish to keep once they come of age. This never applies where one of the parents is German. It is not true, therefore, that Germany never accepts dual nationality. Equally importantly, a German national who acquires the citizenship of another EU/EEA country will not lose their German citizenship (although, as set out under (1) above, this does not affect you anyway since you are already British, even if you may currently lack a document to prove your status as such).