BREAKING: Bank of Canada ends pause on hikes, raises policy rate by 25 basis points
Several factors led to the bank’s decision to raise the key interest rate, including economic growth in Canada. Gross Domestic Product exceeded expectations in the first quarter of this year, growing by 3.1 per cent.
“Overall, excess demand in the economy looks to be more persistent than anticipated,” reads the release.In April, inflation increased for the first time in 10 months to 4.4 per cent. The bank still expects inflation to decline to 3 per cent by this summer, but concerns remain that inflation could get stuck above the 2 per cent target.
Global inflation also remains high. Despite this, the economies of the United States and China are beginning to slow down and Europe’s economy has stalled.
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