Unchanged since 2010, the interest rate has known three fluctuations in less than six months. Bank of Canada raised it once again, for the third time, to set it up at 1.25%. The first increase was in July 2017 at 0,75% and a second time last fall at 1%.
An high increase thanks to an healthy economy combining a low unemployement rate, job creation and a GDP gowth which should be around 2.5% for the first quarter. A decrease of the household indebtedness has been noted as a result of two consecutive increases of the rate in a short time, which should encourage households to save rather than spend. This decrease should not be felt for at least a year.
2018 forecasts
Perspectives for the canadian economy in 2018 shouldn’t be as good as 2017 due in part to uncertainties about geopolitical developments and foreign trade policy (renegotiation of the North American Free Trade Agreement: NAFTA).
The interest rate should stabilized at 1,25% for a while. Bank of Canada doesn’t seem to predict a fourth raise for the next quarter.
