The Bank of Canada said it took a hard look at pausing rate hikes before deciding that another increase was needed to fight stubborn inflation. The bank opted to raise rates 25 basis points to 5% — the highest the rate has been in 22 years.
"If we don’t do enough now, we will likely have to do even more later," Bank of Canada Governor Tiff Macklem said this morning. "If we do too much, we risk making economic conditions unnecessarily painful for everybody."
The Chamber recently hosted the Bank of Canada's Deputy Governor for the mid-year Economic Progress report. Paul Beaudry was clear at that time that the Bank's priority is protecting the value of money for Canadians — even if that means pain in the short-term.
The increased cost of borrowing hurts business investment and darkens what might otherwise be bright skies. Greater Victoria's labour market remains robust and Canada's economy has been stronger than expected.
"Today's announcement stings and people are feeling concerned about their finances," Chamber CEO Bruce Williams said. "No one wants to go through a recession but we've been through tougher times and we will get through these. Keep focused on your day-to-day priorities and get help from experts who can provide the right guidance, which is crucial right now. The Chamber's member directory is a good place to search for professional help so you can make sound fiscal decisions. And make sure to stay connected with the business community. You're not going through these challenges alone."