The Bank of Canada has raised its benchmark interest rate to 4.75%

The Bank of Canada has raised its benchmark interest rate to 4.75%, its highest level since 2001, in response to unexpectedly strong economic growth and rising inflation. This marks the first hike since January when the bank paused its aggressive rate increase campaign. The decision surprised investors and economists, who now anticipate further hikes, with trading in investments known as swaps fully pricing in at least one more hike by the year's end. The rate increase has significantly impacted variable rate mortgage holders, with many seeing their payments soar. Critics argue the bank's approach could exacerbate underlying inflation, particularly in the housing market, and may push the country into recession.