The Bank of Canada raised its prime interest rate yesterday by half a percent, from 3.75 percent to 4.25 percent. The major banks in turn raised their own base lending rates by 50 basis points, from 5.95 percent to 6.45 percent, starting today.
In a release, the Bank of Canada cited ongoing inflation as a key concern. “Inflation around the world remains high and broadly based. Global economic growth is slowing, although it is proving more resilient than was expected at the time of the October Monetary Policy Report (MPR). In the United States, the economy is weakening but consumption continues to be solid and the labour market remains overheated. The gradual easing of global supply bottlenecks continues, although further progress could be disrupted by geopolitical events.”
