Bank of Canada Raises Benchmark Rate

After more than a year at a record low level, Bank of Canada Governor Mark Carney raised the benchmark interest rate for the first time since 2007 by one-quarter percentage point to 0.5 per cent. This is the first time since 2007 that that rate has increased and the Bank of Canada is the first in the Group of Seven to do so since the financial crisis and recession began in 2008.

In a statement Carney emphasized that the increase should not be interpreted as just the first of more to come.

"This decision still leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in light of the significant excess supply in Canada, the strength of domestic spending and the uneven global recovery,'' the central bank said. ``Given the considerable uncertainty surrounding the outlook, any further reduction of monetary stimulus would have to be weighed carefully against domestic and global economic developments.''
[Source - mortgagebrokernews]

Watch a discussion on the rate increase from CBC News - Click Here.

TD led the way raising Prime to 2.5% with CIBC and RBC shortly afterwards. Many other banks and mortgage lenders have also followed with a .25% increase in the prime rate.