The Bank of Canada has raised its overnight target rate by a quarter point, bringing it to 0.50%.
In its statement accompanying the decision, the Bank said: “As the economy continues to expand and inflation pressures remain elevated, the Governing Council expects interest rates will need to rise further.”
The Bank also said inflation is expected to be higher than projected in the near-term. “Persistently elevated inflation is increasing the risk that longer-run inflation expectations could drift upwards.”
This is the BoC’s first rate hike since October 2018. Banks and other financial institutions are expected to raise their prime rate in the coming days, which will increase rates for variable-rate mortgage holders.
To read full statement click here.
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