Bank of Canada raises key interest rate to highest level since April 2001

Bank of Canada raises key interest rate to highest level since April 2001
Bank of Canada raises key interest rate

The Bank of Canada announced a quarter percentage point rate hike this morning, bringing its key interest rate to 4.75 per cent.
BOC to announce interest rate this morning

The Bank of Canada is set to announce its interest rate decision this morning as speculation about another rate hike heats up.
etermined interest rates are not high enough to rebalance the economy and bring inflation back to the two per cent target.
The decision today comes after speculation among economists and forecasters that a recent string of strong economic data would push the central bank to raise interest rates again.

The central bank says excess demand in the economy appears to be more persistent than it had anticipated, citing a tight labour market, better-than-expected economic growth in the first quarter as well as “surprisingly strong” consumption growth.

It says it still expects inflation to fall to about three per cent in the summer from the 4.4 per cent April reading, but with core inflation still elevated, its concerns about inflation getting stuck above two per cent have increased.