Written by Miguel Fernandez Morales | Published on January 27, 2023
The Bank of Canada raised its key interest rate by 0.25% in its first rate announcement of the year, increasing the cost of borrowing for the 8th consecutive time.
The Bank stated that economic growth was stronger than expected and our economy is still in excess demand. Inflation declined to 6.3% in December, however despite this progress, Canadians are still feeling the effects of high inflation in essential household expenses.
As the impact of rising rates continues to work through the economy, the Bank projects that inflation will come down significantly this year with consumer spending and business investment slowing down.
Accordingly, the Governing Council expects to hold the policy rate at its current level while it assesses the impact of the cumulative interest rate increases.
The next Bank of Canada announcement is scheduled for March 8th, 2023. I'll make sure to keep you informed.