Bank of Canada raises interest rates

Ashley Moliere / October 24, 2018

Interest rates have increased twice this year already.

The Bank of Canada announced that it raised the benchmark interest rate from 1.5 to 1.75 overnight. This is the third increase of 2018. Senior Deputy Governor Carolyn Wilkins said that higher rates are not necessarily something to fear.

“I think higher interest rates are always difficult when people haven’t seen them for a long time but when they’re coming at a time when the economy is growing, it’s a sign that were getting back to a more normal phase…it’s good news.” – Carolyn Wilkins, Senior Deputy Governor

In a press conference, Wilkins said that households are adjusting their budgets accordingly, even the ones that are struggling with large debt. Wilkins also mentioned that employment and incomes are growing which can help cushion the adjustment process. She also said that these factors help make the economy more resilient and reduce the chances of bad outcomes for people in the future.

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Governor of the Bank of Canada, Stephen Poloz, confirmed that the bank will interpret the data from the increase to see how Canadians are adjusting. From there, the bank will decide if it should wait for another increase of if it should implement one sooner than anticipated.

With files from Jason Manaois and Matt Lawson.