Bank of Canada hikes rates as economy roars via Globe and Mail

Bank of Canada hikes rates as economy roars” via”The Globe and Mail”

The Bank of Canada has hiked its key interest rate for the second time in less than two months amid surprisingly resurgent growth across the country.

The central bank raised its overnight lending rate by a quarter of a percentage point to 1 per cent Wednesday, surprising many analysts who had not expected another rate increase until at least October.

“Recent economic data have been stronger than expected, supporting the bank’s view that growth in Canada is becoming more broadly based and self-sustaining,” the bank said in a statement.

The bank also cited “robust” consumer spending, “solid” job and income growth, “cooling” housing markets as well as “more widespread strength” in exports and business investment.

The loonie surged after the announcement, jumping more than a cent to top 82 cents (U.S.). The dollar is now up about 3 per cent in the past month and 14 per cent since it hit a low this year of roughly 73 cents in April.

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