Bank of Canada raises interest rate as expected

The Bank of Canada increased its interest rate to 0.5% this morning. The move had been forecasted earlier by the bank, which is attempting to use its financial tools to address soaring inflation. The bank cited the unprovoked invasion of Ukraine, ongoing supply-chain bottlenecks and faster than expected economic growth for causing inflation in Canada to reach 5.1% in January.

The increase will make borrowing more expensive, but it remains uncertain whether it will be enough to cool down housing markets.