The BoC increased its target overnight rate by 0.50% to 4.25%, the highest it's been since 2008.
Today’s rate hike marks the seventh consecutive hike since March in the wake of persistent high inflation.
Third quarter GDP was stronger than expected with demand still in excess of supply and a tight labour market with near historical low unemployment.
There is evidence that the BoC’s monetary policy is restraining domestic demand and the housing market activity continues to decline.
The BoC expects that economic growth will stall through the end of this year and into mid-2023.
CPI remained at 6.90% in October and core inflation hovers around 5%.
Inflation is till too high and short-term inflation expectations remain elevated.
The BoC remains resolute in their commitment to achieving a 2% inflation target and restoring price stability for Canadians.
The BoC’s announcement of today will lead to Prime increasing by a further 0.50% and thus impact customers with Variable Rate Mortgages (VRM) and Adjustable Rate Mortgages (ARM).
Please reach-out out to us should you wish to talk about your current VRM or ARM or your upcoming renewal. The next scheduled date for announcing the overnight rate target is January 25, 2023.
Please feel free to reach out to us if you have questions at all.
Warm regards, Keith Baker | kpbaker@shaw.ca | 604.723.5363 Jackie Zerbe | jacqueline@totalmortgage.ca | 604.724.6982
TotalMortgage.ca (@TotalMortgage.ca)