75 basis point hike won’t be the last says the BoC, as they continue to try and catch up after previous severe policy errors.
The Bank of Canada continues to play catch-up after enabling massive government deficits and contributing to a surge in inflation that is robbing Canadians of our purchasing power.
The BoC raised the benchmark interest rate by 75 basis points, and it now stands at 3.25%.
Of note, this is the highest rate among comparable countries. Canada now has the highest interest rate of any G20 nation in North America or Europe, with the sole exception of Mexico.
This is because the Bank of Canada went so far in terms of enabling Liberal government deficits, and printed so much money, that they are now forced to lurch dramatically the other way.
This is the same BoC that told Canadians interest rates would remain low – around 0.25% – for at least another year.
So much for that.
And they aren’t done hiking rates.
In their official statement, the BoC made it clear that more interest rate hikes are coming:
“Given the outlook for inflation, the Governing Council still judges that the policy interest rate will need to rise further. Quantitative tightening is complementing increases in the policy rate. As the effects of tighter monetary policy work through the economy, we will be assessing how much higher interest rates need to go to return inflation to target.”
Poilievre issues statement
In response to the interest rate hike, CPC leadership race frontrunner Pierre Poilievre issued a statement:
“Today, persistent JustinFlation caused the Bank of Canada to hike the interest rate by 0.75%, another huge rise that will make debt and mortgage payments even more expensive for Canadians as many of them are just hanging on by a thread.
The cause of these rate hikes? JustinFlation.
Trudeau’s inflationary deficits – with the Bank of Canada acting as his ATM – sent a half-trillion dollars out to bid up the costs of goods. And his taxes made it even worse, driving up costs for businesses to produce goods and Canadians to buy them.
Canadians are borrowing more to eat, gas their cars and pay mortgages. Consumer debt was up to $2.32 trillion in Q2 of this year, 8.2% higher than the same time last year. JustinFlation has cause students to take on as many as three jobs and in some cases, visit food banks just to eat.
I have a “common cents” plan to fight JustinFlation. As Prime Minister, I will:
- Axe the carbon tax;
- End the money-printing deficits;
- Restore the Bank of Canada’s independence with a Governor who will fight inflation;
In other words: Make more, cost less. With paycheques, not debt”.
Poilievre’s campaign against the failed policies of the Trudeau government has won the support of many Canadians, in large part because Canadians are watching their purchasing power erode with each passing day.
This latest interest rate hike, and subsequent hikes, are simply more confirmation that the Trudeau/BoC policies have done massive harm to our country.
Spencer Fernando
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