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Bank of Canada Raises Interest Rates to 4.75% – Inflation Concerns Prompt Unexpected Hike

By Editorial Team

June 7, 2023

The Bank of Canada Raises Interest Rates to 4.75%

The Bank of Canada raised interest rates by 25 basis points to 4.75%, the highest level in 22 years.

Unexpected Rate Hike Contrary to Expectations

This happened contrary to expectations, which related to maintaining the interest rate at 4.5%.

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Inflation Concerns Prompt Rate Hike

The bank attributed the unexpected rate hike to growing concerns that inflation would remain above its 2% target.

Inflation Expected to Ease Gradually

The bank expects inflation to gradually ease to 2% by the end of 2024 from a peak of over 8% last year, noting that it accelerated to 4.4% in April from 4.3% in March.

Overall, this unexpected rate hike serves as a reminder of the Bank of Canada’s commitment to controlling inflation and maintaining economic stability.