BoC raises key interest rate to 5%, expects slower return to inflation target

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The central bank hiked its key interest rate by a quarter of a percentage point, bringing it to five per cent.Forecasters were widely anticipating the central bank to raise rates as the economy continues to run hotter than expected, despite interest rates being at the highest levels in decades. The Bank of Canada says the rate hike was prompted by elevated demand in the economy driven by strong consumer spending, as well as signs that prices continue to rise rapidly.

“Canada’s economy has been stronger than expected, with more momentum in demand,” the Bank of Canada said in its statement about the decision. The central bank stayed mum on whether it plans to raise rates again. Instead, it says the governing council will continue to monitor how the economy evolves.From our newsroom to your inbox at noon, the latest headlines, stories, opinion and photos from the Toronto Sun.By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails or any newsletter.

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