The Bank of Canada raised its key interest rate by the highest amount in more than 20 years warning that more rate hikes are coming!
"With the economy moving into excess demand and inflation persisting well above target, the governing council judges that interest rates will need to rise further," the Bank of Canada said in its statement.
What this means to you?
This increase in interest rates is expected to prompt banks to raise their prime rates - increasing the cost of loans including variable-rate mortgages.
The Bank of Canada said it now expects the annual inflation rate to average almost six per cent in the first half of this year and remain well above its control range of one to three per cent throughout 2022 before easing to about 2.5 per cent in the second half of 2023. The bank also said while the housing market was strong in the first quarter of this year, it expected sales to soften somewhat in the second quarter as mortgage rates rise.
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