Canadians are reacting to news that the Bank of Canada will be holding its benchmark interest rate at five per cent.
This is the fourth time in a row the Bank of Canada (BOC) has held its interest rate.
“In Canada, the economy has stalled since the middle of 2023 and growth will likely remain close to zero through the first quarter of 2024. Consumers have pulled back their spending in response to higher prices and interest rates, and business investment has contracted,” the bank said on Wednesday.
The bank said that the country’s economic growth is expected to improve gradually around the middle of this year.
In a release, the bank explained that the Canadian labour market has seen conditions ease, with job vacancies returning to near pre-pandemic levels and new jobs being created at a slower rate than population growth. However, wages are still rising around four to five per cent.
This is the first interest rate announcement from the BOC for the year. At the end of 2023, the Consumer Price Index inflation was 3.4 per cent.
In seeking to control soaring inflation post-pandemic, the BOC hiked rates 10 times between March 2022 and July 2023, pushing them up to a 22-year high of 5 per cent.
“Shelter costs remain the biggest contributor to above-target inflation,” the bank said Wednesday, adding that they expect inflation to stay around three per cent during the first half of 2024, before gradually easing and returning to the two per cent target next year.
CANADIANS REACT TO BANK OF CANADA HOLDING INTEREST RATES AT FIVE PER CENT
Many Canadians ran to social media to share their thoughts on the situation after hoping that the BOC would cut interest rates due to rising mortgage rates.
“Mortgage holders who are still alive and in good standing dodge another bullet, return to the daily grind,” wrote one person on X.
“Doesn’t change the fact Canadians can’t afford to make ends meet,” wrote one person.
“Really? Unreal. Bring it down,” shared another.
