Toronto Real Estate News

It's the third hike in three months, taking the overnight rate up in stages from the rock-bottom 0.25 per cent that was set by the central bank during the recession to help stimulate the economy. 

The hike, which most economists had predicted and supported, will likely have the effect of increasing borrowing costs on short-term loans, such as variable mortgages and lines of credit. 

But analysts were also looking for acknowledgment from governor Mark Carney that the recovery has taken a few surprise body blows of late and that he will now pause for the next few months until the picture clears. 

Instead, the bank's governing council appeared content to stick to its previously optimistic outlook and gave no hint about plans for future decisions, saying that will depend on the "unusual uncertainty" of the outlook. 

As for the economy, the council remained upbeat, downplaying its overly optimistic April and July forecasts. 

"Economic activity in Canada was slightly softer in the second quarter than the bank had expected, although consumption and investment have evolved largely as anticipated," the council writes. 

"Going forward, consumption growth is expected to remain solid and business investment to rise strongly." 

Allen Mayer | Broker

www.allenmayer.com