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Bank of Canada raises interest rate to one percent

Staff Writer |
The Bank of Canada has hiked its benchmark rate to 1 percent for a second time in less than two months amid surprisingly resurgent growth across the country.

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After seven years, the Bank of Canada approved a month ago a rise of 0.25 percentage points, and on Wednesday announced another similar rise to reach one percent.

According to the institution, recent economic data have been better and 'Canada's growth is increasingly widespread and more self-sufficient.'

The tightening of credit conditions also responds to 'significant geopolitical risks, as well as the considerable uncertainties surrounding international trade policies,' the bank said.

According to the source, consumer spending remains robust, backed by strong and steady growth in employment and income, in a context of stronger business investment and exports.

The increase in the benchmark interest rate from 0.75 to one percent also took into consideration the real estate sector's performance, with less speed in the domestic and foreign private speculation processes.

According to the report, the Bank of Canada will pay "a lot of attention to the economy's sensitivity to higher interest rates," given the high-level of household indebtedness.