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For the first time in three years, the Bank of Canada has raised a key interest rate, bumping its overnight rate by a quarter-point to 0.50 percent.
More increases are coming, with the war in Ukraine forcing the bank’s hand to deal with inflation in Canada that the war is causing, the bank warned.
TRENDPOST: Inflation in Canada is running at 5.1 percent, a 30-year high, and now with the Ukraine war pushing up inflation rates yet higher, there will be more pressure on its central bank to keep raising rates. But as with other nations, the fear of Dragflation—declining economies and rising inflation—may well slow down the rate increases.
Canada became the second G7 country, following the U.K., to raise interest rates since the COVID War era began two years ago.