BREAKING: Bank of Canada hikes key interest rate by quarter of percentage point, bringing it to 4.5 per cent
The rate increase marks the eighth consecutive hike since March as the central bank fights off decades-high inflation.In a news release, the Bank of Canada said the Canadian economy is still overheated, prompting its governing council to raise interest rates once again.
The Bank of Canada also published its latest monetary policy report Wednesday, providing updated projections for the economy and inflation. At the same time, the labour market is still tight and inflation expectations among businesses and consumers are still elevated, the central bank said. As high interest rates continue to affect the economy more broadly, the central bank expects the labour market to soften in the coming months.
As this process unfolds, the Bank of Canada projects growth in the economy will stall through the first half of the year before picking back up toward the end of the year. Although the central bank is focused on excess demand in the domestic economy, it notes that global factors could continue to affect inflation.
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