Tuesday July 11, 2023 | VICTORIA, BC [Updated 3:40 pm]
by Mary P Brooke | Island Social Trends
SECTIONS: ECONOMY | FOOD SECURITY | 10th Bank of Canada rate increase in 16 months (July 12, 2023)
The Bank of Canada will announce its decision on the target for the overnight rate on Wednesday July 12.
The Bank is this year still continuing it efforts to tamp down inflation based on the premise that increasing interest rates will cool consumer spending.
The Bank has ratcheted up the interest rate nine times in the past 16 months: seven times in 2022, an eighth time in January 2023, and the ninth time last month (on June 7) with an increase of 25 basis points to 4.75%.
Any rate increase that might be announced tomorrow would likely not be higher than 0.25% (a quarter percent), but even that could be too much. Call it overkill.
July 12 announcement:
The July 12 Bank of Canada update will be announced through a press release at 10 am Eastern (7 am Pacific). Tiff Macklem, Governor of the Bank of Canada, and Carolyn Rogers, Senior Deputy Governor, will hold a press conference at 11 am EDT (8 am Pacific). A press release will provide a brief explanation of the decision and the live teleconference session will be available later on the Bank of Canada website.
The Bank will publish its quarterly Monetary Policy Report (MPR) at the same time as the rate decision.
BC Premier Eby on a possible next rate hike:
Today BC Premier Eby said that the steady grind of continued interest rate increases has had a negative effect “on people who can least afford it”.
“I have a real sense of dread about the next Bank of Canada rate hike. The impact on British Columbians is pretty profound,” said Eby.
“There is a strong argument to be made the rate increases are having an effect, but it seems to be having an effect on those who can least afford it,” said the Premier whose government has rolled out BC affordability credits in the past year (including a BC Hydro credit).
Over 11 million people received the federal ‘grocery rebate’ last week (a doubling of the usual GST rebate to low-income Canadians). That’s over 27 percent of the Canadian population.
Interest rates that keep going up become embedded in the cost of everything. Food banks have never been busier.
The cost to carry a mortgage keeps going up (presently for people with variable rate mortgages, but over the next few years also for people with fixed-rate mortgages). When interest rates go up on investment properties then tenant rents go up as well (building owners may have their own interest-rate-impacted expenses and those get pushed forward to the tenants).
Recent stats are showing that many people are left with less than $200 after paying rent/mortgage and bills.
It’s clear that the gap has significantly widened between the have’s and the have-nots in our society. People who are gainfully employed have bought homes, invested, and enjoyed the opportunity for healthy lifestyles. Other people with precarious incomes have fallen in the other direction.
===== RELATED:
10th Bank of Canada rate increase in 16 months (July 12, 2023)
Next Bank of Canada update coming July 12 (July 7, 2023)
Bank of Canada Deputy Governor draws a crowd in Victoria (June 8, 2023)
Small bank rate increase is still an economic shock (January 25, 2023)
SECTIONS: ECONOMY | FOOD SECURITY
===== ABOUT THE WRITER:
Mary P Brooke has been writing insight-news since 2008. Her publication series has covered news of the day through broader socioeconomic and political insights in the west shore region as well as key sociopolitical and socioeconomic issues of today’s society, as published by Brookeline Publishing House Inc under these mastheads: MapleLine Magazine (2008-2010), Sooke Voice News (2011-2013), West Shore Voice News (2014-2020), and Island Social Trends (since 2020).
The Island Social Trends print edition (previously West Shore Voice News) launches later in July 2023, after a three-year hiatus during the pandemic years, while continuing here online at IslandSocialTrends.ca. The print-bound copies of MapleLine Magazine, Sooke Voice News and West Shore Voice News are already part of the permanent collections at the Sooke Region Museum.
Ms Brooke now reports with the BC Legislative Press Gallery, as part of delivering regional news on Vancouver Island.
This year, Mary P Brooke has been nominated for the Jack Webster Foundation Shelley Fralic Award to recognize a professional female journalist whose journalism makes a contribution to the community.
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