In a relatively short announcement, yesterday, December 6, 2017, the Bank of Canada (BoC) maintained its target for the overnight rate at 1%, following the two consecutive rate hikes at the July and September meetings. The Bank Rate is correspondingly 1.25% and the deposit rate is 0.75%.
This means that the Prime rate on your mortgage, line of credit or student loan will remain at 3.20%. BoC has shared some insight on the current economic conditions in relation to their announcement.
This is no surprise to us. It was widely expected that the BoC would retake a breather this round despite the much stronger than expected November employment report and the recent uptick in inflation. The central bank sees ongoing slack in the labour market, likely referring to continued weakness in average hours worked.
Our in-house Chief Economist, Dr Sherry Cooper has shared some insight on the current economic conditions in relation to the recent announcement from BoC.
For the full rate announcement, please click here.
Based on this recent announcement, and the anticipation that the Prime Rate will still remain low for at least until the beginning of 2018, fixed interest rates have risen approximately 0.25% in the last quarter and we anticipate further rate increases in the New Year. The next scheduled date for announcing the overnight rate target from BoC is January 17, 2018.
For the 2018 Prime Rate announcement schedule from the BoC, please click here.
Dr. S Cooper, “No Surprises from The Bank of Canada”, Sherry Cooper, accessed December 6, 2017, http://sherrycooper.com/articles/no-surprises-bank-canada-2/