BoC hikes interest rate

The Bank of Canada announced a 0.25 per cent hike in their benchmark interest rate on July 12 of last week, now leaving the interest rate at 0.75 per cent from 0.50 per cent. This marks the first increase in nearly seven years, despite the fact that strong economic growth has been predicted for this year. The hike is bound to increase costs of mortgages, home equity lines of credit and other loans associated with the big bank prime rates. Almost immediately following the announcement, TD, Scotia Bank, CIBC, BMO and RBC all increased their prime lending rates to 2.95 per cent from 2.7 per cent. Inflation remains below the bank’s two percent target and growth is continuing to broaden across industries and regions. The Bank of Canada’s next scheduled rate announcement is Sept. 6.