Loans Canada CEO, Scott Satov joins Paul Bagnall of BNN Bloomberg to discuss the Bank of Canada’s 100 basis point rate hike and how it will affect household debt.
The rise in interest rates will put even more pressure on Canadian households that are already battling record-high inflation. Satov examines what the household debt profile of the average Canadian looks like, what type of debt will be affected most, and the risk of the default rate rising.
More on the Bank of Canada’s rate hike announcement:
- The Bank of Canada surprised consumers by raising the overnight rate by 100 basis points today, far more than the expected 75 basis points.
- The 100 basis point hike will bring the national overnight interest rate from 1.5% to 2.5%, the 4th increase in 2022.
- The next rate hike is expected to be another 50 basis points in September of 2022, with an expected final 6th increase before the end of the year. The Bank of Canada is expected to pause rate hikes throughout 2023.
- For now, the central bank is trying to keep up with aggressive moves by the U.S. Federal Reserve, and attempting to cool down inflation.
