Bank of Canada raises rates to 5.00%

Author

Jay Lutz
July 12, 2023

Sponsored by QYOU Media

Bank of Canada raises rates to 5.00%

As was widely expected, the Bank of Canada raised its overnight rate by another 25 basis points, bringing the cost of borrowing to 5%.

Following last month’s quarter-point rate increase, policy makers decided to maintain the central bank’s resolute of tackling runaway inflation following a brief pause in May. Citing strong demand and a tight labour market as the culprit behind persistent inflation, the Bank of Canada acknowledged the consumer is more resilient than expected, particularly in the US.

Although policy makers are forecasting a slowdown in consumer spending in response to higher interest rates, incoming economic data suggests there continues to be excess demand in the economy. “Strong population growth from immigration is adding both demand and supply to the economy: newcomers are helping to ease the shortage of workers while also boosting consumer spending and adding to demand for housing,” the bank’s statement reads.

You can read more on the matter here.

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