On Wednesday April 13th, the Bank of Canada announced that it would raise the benchmark interest rate to 1 percent, meaning it has risen by half a percentage point. The Bank of Canada’s interest rate impacts Canadians and businesses because it influences the rates paid and received on savings accounts, mortgages, GICs, etc. With Canada experiencing some of the highest inflation it has seen in over 30 years, economists are expecting interest rates to continue rising in order to keep the increasing prices under control.
Joining us in this segment to chat about the rate hike, its motivations and impact for Canadians and businesses is Don Drummond, Stauffer-Dunning Fellow and Adjunct Professor at the School of Policy Studies here at Queen’s University. Drummond provides insights into why there are issues with leaving interests rates too low for too long, the long and short-term benefits of the rate hike on the Canadian economy and for average Canadians and businesses.