Canada May Hike Rates

HSBC said on Tuesday that it now forecasts the Bank of Canada to hike interest rates in July and October, having previously forecast the central bank to keep rates on hold until the final quarter of 2018, Reuters reported. Canada’s central bank meets on Wednesday and is expected to deliver its first rate rise in nearly seven years and in recent weeks policymakers have been laying the groundwork for a hike. In a note outlining changes to its current policy rates and forecasts, HSBC said that in Canada, “this is due to the much more hawkish tone struck by the central bank over recent weeks.” The Bank of Canada’s key rate stands at 0.50%. HSBC expects it to rise to 0.75% in the third quarter and 1% in the fourth quarter. More than seven in 10 Canadians rate their ability to budget for an interest rate increase of one percentage point as ‘less than optimal’, a nationwide survey found. The prospect of climbing rates has nearly half of Canadians on edge, according to a recent Ipsos poll conducted by MNP, which runs one of the largest personal insolvency firms in Canada.