Bank Of Canada Raises Interest Rate To 1.25%

Rate increase will have a significant impact on many Canadians, including the 33% who report being unable to keep up with monthly bills and debt payments.

We are witnessing one of the biggest contradictions of recent times.

On the one hand, the media and the government tell us that our economy is doing better than ever.

On the the other hand, pessimism about the future of the economy has reached massive levels, household debt is at a record high, one third of Canadians can’t keep up with monthly payments, and another 48% have just as $200 cushion every month separating them from serious financial trouble.

Almost nobody feels that our society is richer, it takes two incomes to barely afford what was once possible with one, and the much-hyped unemployment rate leaves out those who have given up on looking for work and doesn’t focus on the quality of jobs – which has severely declined.

Now, as a result of the prevailing government mindset and the messaging about how great the economy is, interest rates are going up again.

The Bank of Canada cited ‘strong’ economic numbers as the justification for raising the benchmark interest rate from 1% to 1.25% (the highest level since 2009), but the projections for future growth are not good.

In fact, a recent report said Canada’s economy would only grow a minuscule 1.7% per-year over the next half-decade. When accounting for population growth and the true inflation rate that we experience on the ground (rather than the reported rate), this is no growth at all.

As as result, the gap between the message we are told about the economy and the truth of what we are experiencing will only continue to grow.

Spencer Fernando

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6 comments Add yours
  1. If there is a portion of the population who cannot set monies aside for a rainy day why should we subsidize them by keeping interest rates low?

    1. Wow George B., you really are an ignorant ass! “Why should we SUBSIDIZE them by keeping interest rates low”. So you support a rise in interest rates? What normal person agrees to that? A rich Liberal I would guess who has a french villa they forgot they owned, lol. And the ‘rainy days’ are not just ‘days’ where people have to compensate for, these increases affect everyone’s overhead month after month, year after year! You must be a troll because no one with a moral compass would post such a pathetic comment!

  2. Trudeau and his PMO have initiated fake news. CBC, CTV, Toronto Star, AP and more MSM are complicit. The economy is in the dumpster and as history has shown time and again, a conservative government is required to fix it. It won’t be easy. About 12 years of uninterrupted CPC government I would estimate. Liberal and SpeNDP party ideologies make them incapable of governing efficiently and, therefore, effectively. Tell your kids, neighbours and anyone who will listen. We most vote them out.

  3. You are right, Bruce, I concur. Funny how they spin a “great economy” then barely increase the rate, not enough to make any marked improvement on our economy! They have created such an untenable problem, keeping interest rates low, and allowing such a ridiculous rise in real estate that most people cannot really afford what they have mortgaged themselves into. This over-inflated real estate is a ponzi scheme and does NOT reflect the true nature of our sick economy! Having kept the interest rates so artificially low has hurt us, in that it has stagnated our economy, without bank interest, there is no reason to keep money in the banks. Without money in accounts, there is no disposible income and putting everhthing on credit cards simply exacerbates the insurmountable debt load. The actions of government and the stupidity of Canadians has conspired to destroy our economy and there is no end to the destructin in sight, just yet! We need a correction and the Conservatives can bring it to us…. IF they get us away from globalization! Iceland did it and they did it right!

  4. It was about time to raise interest rates. The economy is heating up, but also we have too much debt so higher interest rates will hopefully act as a disincentive to taking on too much debt.

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