Canadian economic conditions could prompt the Bank of Canada to raise interest rates next week.
At least, that’s the scenario predicted by many pundits, including Deloitte’s chief economist, Dawn Desjardins The Canadian Press.
Even if an economic turning point, marked by a rise in the country’s unemployment rate and a slowdown in wage growth, seems to have begun, he believes these changes may not be fast enough in the eyes of the institution, which might be cautioned .
Last month, the Bank of Canada raised interest rates to 4.75% – a 25-point increase – to rebalance inflation, which it plans to bring down to 2%. Note that the inflation rate reached 3.4% last May.
“The data collected since January has been enough to convince the Council that monetary policy should be more restrictive to rebalance supply and demand and bring inflation back to the 2 percent target,” the institution said established in June, reports the Canadian press.
So far, no information has been leaked on Bank of Canada’s intentions for the month of July. The latter indicated that a decision would be made based on observation of the data.
It should be noted that the consequences of these incremental increases can be found in the portfolios of consumers as their mortgage loans and lines of credit increase.
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