The bank of Canada announced today that it is maintaining interest rates (the bank rate) at 1.25% citing deteriorating conditions in the world economy and increased uncertainty.
The bank of Canada has held interest rates at 1.25% since September 2010. As you can see from the graph above interest rates hit a historic low point in May 2009 at 0.5% and have since increased to the current rate of 1.25%.
In my opinion interest rates will eventually rise over the long term, the big question is when. As the Bank of Canada stated in it’s release there is increased uncertainty in the global economy with European debt crisis and tensions with Iran which will keep interest rates low for the time being. The big trigger that will move interest rates higher will be increased inflation which is bound to eventually happen in a low interest rate environment. I believe there will be a significant impact to housing prices given how over leveraged the average Canadian is today when interest rates do eventually rise.
When do you think we’ll see interest rise from here?
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Nadeem
Hey Andrew, I was searching for a way to automatically download data from the web. Came across...