The Bank of Canada (BoC) announced today that it will be increasing its overnight interest rate by 25 basis points, bringing it to 0.75%. This move was widely expected by economists and market analysts, as the BoC has been signaling for some time that it would likely raise rates in response to the strong economic recovery that has been taking place in Canada.
More information is available here from the BCREA
This increase in the overnight rate is significant for several reasons. Firstly, it is a sign that the Canadian economy is doing well and that the BoC feels confident in its ability to handle higher interest rates. This is good news for Canadians, as it suggests that the country's economic recovery is on solid footing.
Additionally, the interest rate increase will have a direct impact on the housing market. As borrowing costs increase, it is likely that we will see a slowdown in housing activity and a decrease in home prices. This is likely to put some pressure on Canadians who have taken on large amounts of debt, such as those with mortgages or lines of credit.
However, it's important to note that the interest rate increase is not all bad news. It will also be positive for savers, as it will mean that they will earn more interest on their savings accounts and investments.
More information is available here from the BCREA