On the morning of Sept 8th, 2010 the Bank of Canada raised its overnight lending rate by .25% to 1 percent. This move was somewhat expected by many economists, but unwanted by politicians and consumers. The rate increase affects what interest rates banks and lending institutions will charge on loans to consumers and businesses. This means payments increase on everything from variable mortgages, lines of credit, student debt, to car loans.
Canada and Australia are the only two countries to raise their national lending rates since the economic collapse in the middle of 2008. Rate increases were primarily to cool off inflation and what seemed like a rapid recovery. With a stabilization in the real estate market and mixed economic data, the BofC is expected to halt further rate increases until the second quarter of 2011.