The Bank of Canada raises its key rate by 50 points to 1.5%.
Posted at 10:01 a.m.
This rise in interest rates, the third since the beginning of the year, was widely expected by economists. The central bank has pledged to bring the inflation rate down to its target of 2%. We are still a long way off, with inflation peaking at 6.8%, a 30-year high.
More hikes are to come, the Bank of Canada said in its statement. “Given the excess demand in the economy and inflation that remains well above target and is expected to continue to rise in the near term, Governing Council still believes that interest rates will have to increase further”.
The increase in the key rate has an immediate impact on the cost of variable rate credit, such as lines and credit cards, as well as variable rate mortgages. At 1.5%, the Bank of Canada’s key rate is still 25 basis points lower than it was before the pandemic.
More details to come