OTTAWA — The Bank of Canada raised interest rates again on Wednesday, hitting the economy with even higher borrowing costs as new projections suggest it will take longer for inflation to fall back to two per cent.
The central bank hiked its key interest rate by a quarter of a percentage point, bringing it to five per cent, the highest it's been since 2001.
"On balance, our assessment was that the cost of delaying action was larger than the benefit of waiting." "If new information suggests we need to do more, we are prepared to increase our policy rate further. But we don’t want to do more than we have to," he said. "That should be enough to push the BoC back on the sidelines with no additional interest rate increases this year. But they are clearly willing to hike again at the next decision in September if inflation in particular doesn't show further signs of easing," Janzen said in a note.
The Bank of Canada was pushed off the sidelines in June after a string of hot economic data suggested rates were not yet high enough to quash inflation as quickly as it wants to see.
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