The Bank of Canada announced today that it is raising it’s key interest rate to 1.5%. Canadian families are facing an increase in costs across all fronts – and it’s something that 620 CKRM financial analyst Brian Golly says will see families having to tighten spending.
The rise in the interest rate was not something that was unexpected – and analysts say that we will likely see the rate rise by another 50 points.
“Interest rates are going up – which means borrowing costs are going up.”, says Brian Golly. “Interest rates have been very low for a very long time, we got used to these low rates, but we do know all good things come to an end.”
Golly says that the increase in rates is due in part to efforts being put forward by the bank of Canada to lower the rate of inflation.
“We expect another 50 basis points increase, maybe even a little bit more. Getting inflation down to around 2% is key for the Bank of Canada and they’re keeping that focus. Expect more increases, likely more than 50 basis points.”
It’s time to tighten spending and take steps to live inside of your means says Brian. “Take a look at your bank statements and assess the last 3-6 months and do an analysis of that. It’s time to do some belt tightening.”
Credit card debt and variable rate loans are a key way to avoid the negative impact of climbing interest rates.
“If you can reduce those things and get out of debt – climbing interest rates won’t be of as much concern.”
