Experts are predicting the Bank of Canada will increase its benchmark interest rate by half a percentage point on Wednesday. The bump is designed to reduce inflation which is at its highest level in decades. This will be the second such hike in a row and a signal that the pandemic-induced era of cheap money has come to an end.
For people who owe money or want to borrow money, rates will be higher for them. The price of almost everything has gone up in price. From food to gasoline and even housing has exploded in price during the pandemic. This was largely due to the supply and demand imbalances the world experienced over the past 2 years.
Currently, Canada sits at an inflation rate of about 6.8 per cent which is the highest in 30 years. Nathan Janzen, an economist with RBC said “the looming question is whether rates need to rise above that neutral range to get inflation back under control,”
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