Bank of Canada boosts key lending rate
Posted Jun 1, 2010 8:00 am.
This article is more than 5 years old.
The Governor of the Bank of Canada has increased the country’s key lending rate by 0.25 per cent to an even half a per cent.
It’s the first rate hike in more than a year.
The decision to raise rates will affect a number of financial vehicles such as variable rate mortgages and lines of credit tied to the prime rate.
The move is being done to try and control economic growth and keep inflation in check.
More rate hikes are expected in the coming months, but each increase will be monitored to see what impact it has on business and consumer spending.
The Calgary Herald reports a recent Leger Marketing survey suggests 72 per cent of Alberta business leaders and 52 per cent of consumers in this province are worried about rising interest.
The Chief Economist of Global Asset Management at the Royal Bank, Patricia Croft tells 660News people need to keep things in perspective.
Croft admits higher interest rates will have an impact, but the financial pain at this point won’t be that great.
She likens Wednesday’s move by the Bank of Canada to somebody taking away the punch bowl at a party.
