Graham Ogden

B Comm and Realtor®

Direct: 1 780 908-1224 |

Bank of Canada Increases Benchmark Rate

As many economists expected, the Bank of Canada announced today that it is increasing the overnight rate .25 per cent, the fourth increase since last summer, given strong economic improvements. The economy and job market are performing well, housing is beginning to stabilize, oil prices have gone up, exports are strong and businesses are spending. The Bank also wants to keep inflation near target. The Bank “will continue to take a gradual approach” to further increases and is certainly watching the affect of ongoing tariff disputes and the “economy’s adjustment to higher interest rates.”  The next rate-setting day is September 5th.


Homeowners with variable-rate mortgages will see their rate increase along with a possible modest payment increase. Lines of credit will be similarly affected.

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Today’s Bank of Canada rate hold announcement marks almost four straight years that the key benchmark rate has remained unchanged, since September 8, 2010. Great news if you have a variable-rate mortgage or home equity line of credit; the prime rate stays at 3%.

 

The announcement noted that “the risks to the outlook for inflation remain roughly balanced, while the risks associated with household imbalances have not diminished.” With these considerations, the Bank is maintaining its monetary policy stimulus, and remains neutral with respect to the timing and direction of the next change.

 

The next rate-setting day is October 22nd.

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Data is deemed reliable but is not guaranteed accurate by the REALTORS® Association of Edmonton.