The Bank of Canada announced today that it will be increasing its key lending rate by a quarter percent to .50%. In doing so, it becomes the first country in the G7 to increase its rates since the global recession started in 2008.
Analysts predict that the over the next year, the Bank of Canada will gradually increase its rate another one 1-1.5%, a quarter basis point at a time. Bank of Canada leader Mark Carney expressed that there is still considerable uncertainty in the global economic outlook, and that all future rate increases will have to be weighed carefully.
Still, today’s announcement will mean higher borrowing costs for individuals and businesses that have loans linked to bank prime lending rates.
The next rate announcement will occur in July.