Bank of Canada Holds Target Rate at 5%

The Bank of Canada announced its third consecutive rate hold in its final announcement of the year, maintaining the target rate at 5%.
In Canada, the economy continues to slow down after hitting a roadblock in the middle of 2023. Higher interest rates are helping to alleviate inflationary pressures and curb spending; consumption growth was nearly stagnant in the last two quarters, and business investment has remained flat over the past year.
Overall inflation dropped to 3.1% in October, however the Bank remains concerned about risks to the outlook for inflation. While the Bank has maintained that they are prepared to raise the policy rate further if needed, economists believe that these rate pauses may be predictors of rate cuts to come in 2024.
The Bank of Canada rate affects the cost of borrowing for various loans, including variable rate mortgages and lines of credit. If you have any questions about your current mortgage, your mortgage payments, or if your mortgage is coming up for renewal soon, please reach out to me.
The next Bank of Canada announcement is scheduled for January 24th, 2024. I’ll make sure to keep you informed.