Bank of Canada plans to announce another interest rate hike soon. Read the details

A key interest rate hike is on the anvil, as per the Bank of Canada, which is the 5th consecutive rate hike this year. The hike that banks expect is 0.75 per cent, thereby increasing the rate to 3.25 per cent.

The rate hikes would ensure lower borrowings, which will affect the industry as liquidity is mopped up by the central bank from the market by this procedure.

The rate of interest that business houses would have to pay for borrowing would be higher, which would affect business prospects in Canada.


Banks worldwide raise business rates mainly to keep the ever-increasing inflation in check. Unfortunately, the prices seem to be forever increasing on essential goods and with the onset of winter in another three months, heating costs a lot.

Canada's year-on-year inflation rate is as high as 7.6%, which is way above the target of 2% planned by the central bank.

The decision to raise the rates comes when the unemployment figures are at the lowest imaginable under current circumstances.

The Canadian economy is looking robust and growing for all practical reasons, but a slowdown is expected soon.



It's a wonder that despite high inflation in food prices, fuel and gas prices, and house prices, the Canadian economy has been performing well. But economists are wondering for how long? Canadians are experiencing some of the highest inflation rates in 40 years.

The most sensitive segment affected by the hike in interests is real estate. It is way above the usual food and phone prices because real estate is costly. The hike is going to affect homebuyers in Canada as the prices are too hot at the moment.

To curb inflation, the central bank plans to increase the rates. It is important to note that the cool-off in the real estate sector has already begun, with a 40% drop in prices in Vancouver and a 34% drop in Toronto. If the central bank increases the rate, whether inflation cools on other essential goods will be seen on Wednesday.

FAQ

What is the capital of Canada?
The capital of Canada is Ottawa.

Who is the Prime Minister of Canada?
Justin Trudeau