Canada’s economy surpassed expectations with strong momentum in demand, consumption growth and more activity in the housing market. Population growth from immigration is helping alleviate the labor shortage but also contributing to consumer spending and adding to demand for housing.
Inflation has decreased considerably from the 8.1% we witnessed last summer to 3.4% in May, however the bank has indicated that underlying inflationary pressures are proving to be more persistent. They now forecast that inflation will take longer to reach the 2% target than previously anticipated.
Considering these factors, the Bank of Canada has determined that higher interest rates are necessary to slow down the growth of demand in the economy and alleviate price pressures.
If you have any questions about how this rate increase may affect your specific mortgage situation, please don’t hesitate to reach out to me. We are here to assist you.
The next Bank of Canada announcement is scheduled for September 6th, 2023. We will make sure to keep you informed.
Summarized
Kelly MioBertolo,
Mortgage Agent
Mortgage Alliance
