Rate hike bankruptcy against inflation

Rate hike: bankruptcy against inflation

The Bank of Canada has indicated that interest rates could rise further if inflation or even the status quo rises.

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“It’s like the Bank of Canada wants people to go bankrupt” to counter inflation, said Michel Girard, economics columnist for the Journal de Montréal.

“It’s a terrible measure, but it’s global,” he added.

He recalls that just under a year ago it was still possible to get a 5-year mortgage at 2% interest, while today you can get a loan at almost 6% interest.

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“It’s scary what it represents as an increase,” he said.

“Last June, the inflation rate in Canada was 8.1%. As we speak we are at 5%. But the goal of the Bank of Canada and central banks around the world is to cut about 2%.”

In his opinion, “there is still a long way to go”.

It remains to be seen whether the increase will have the expected impact, Mr Girard argued.

“If [l’inflation] Having reached 3%, it is certain that interest rates will not rise for a long time”, he specified.