Canadian banks poised for 0.25% interest rate hike: lot of pain yet to come, economist says

Canada’s labour market continues to churn out jobs providing momentum for a consensus among economists who expect a small rate hike on Wednesday.

Now, all six of Canada’s largest commercial banks expect a quarter of a percentage point increase in the Bank of Canada’s key interest rate.

The latest snapshot of an expanding job market shows the creation of 60,000 positions in June, even as the jobless rate ticked higher. That’s because immigration increased the size of the job market and also pushed up the number of people looking for a job.

“There’s still going to be a level of pain felt by a lot of consumers and a lot of the general public based on the higher rates that we’ve seen the central bank raise over the last year or so and the simple reality is a lot of that pain is still yet to come in the markets,” says Nate Thooft of Manulife Investment Management.

Anne Gaviola has more.

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