The Bank of Canada hiked interest rates yet again on Wednesday, the eighth such move since the central bank began its recent series of increases last year.
The rise to 4.5% marked a quarter-percent growth in the “policy interest rate,” a rate which the Bank uses as a primary tool to control inflation in Canada.
The Bank also signalled that this may be the last such rate increase, as they hope to now pause the recent trend.
Combined with lower energy prices and improving supply chains around the world, the Bank expects the new policy rate of 4.5% to help Canadians deal with rising prices.
The Bank said the move was done to lower the Consumer Price Index (CPI), a catalogue representing everyday prices that impact typical consumers in Canada.
“The effects of higher interest rates […] are expected to bring CPI inflation down to around 3% in the middle of this year,” the Bank of Canada announcement said.
Earlier this month, True North reported that food prices had risen 11% year-over-year.
In an Ipsos Public Affairs poll published today by Global News, 1-in-5 Canadians said they were completely out of money. The respondents said they could not pay higher prices for necessities.
The Bank of Canada’s interest rate hike is expected to combat the struggle of Canadians by lowering the CPI, or in other words, lowering the prices of typical consumer goods.