Bank of Canada Raises Interest Rates by 25 Basis Points
Aggressive Move to Combat Rising Inflation
Central Bank Predicts Inflation to Remain High
In a surprise move, the Bank of Canada has raised its benchmark interest rate by 25 basis points to 4.75%, the highest level since 2001. This marks the first interest rate hike by the central bank since January.
The move comes as the Bank of Canada seeks to rein in soaring inflation, which has reached its highest level in decades. The central bank's latest economic outlook predicts that inflation will remain elevated at around 8% in the coming months.
The central bank's decision to raise interest rates is in line with the expectations of economists, who had widely predicted a quarter-percentage point increase. However, the larger-than-expected hike has raised concerns about the potential impact on the economy.
The Bank of Canada will release its next interest rate decision on July 12th. Economists are unanimous in their prediction that the central bank will raise rates again by 25 basis points, bringing the benchmark rate to 5%.
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