On Dec 7, 2022, the Bank of Canada made another increase to the policy interest rate. Prime went up another half a percent, bringing the policy rate up to 4.25% and the prime lending rate to 6.45%. This is the Bank’s seventh consecutive rate hike and was expected.
The central bank also delivered a shift in tone alongside the rate hike, saying in a statement that it would “consider whether the policy rate needs to rise further” rather than the more direct language used in previous announcements earlier this year, when the Bank had said outright that rates would need to go higher to effectively tamp down inflation.
Looking ahead, the Bank said it “will be considering whether the policy interest rate needs to rise further to bring supply and demand back into balance and return inflation to target.”
Banks and other financial institutions are expected to raise their prime lending rate, increasing rates for variable-rate mortgage holders.
Don’t panic! If you feel unsure of what to do next and want a review of your mortgage, reach out and let’s chat. I am here to help and have the resources!
The next scheduled date for announcing the overnight rate target is January 25, 2023 The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR at the same time.