The Bank of Canada held its key interest rate at 5%, with governor Tiff Macklem saying it was too soon for cuts. CBC News speaks with an economist and a couple who might be forced to sell their home if interest rates don't come down.

Downtown

The Bank of Canada has decided to maintain its key interest rate at 5%. This decision was announced by governor Tiff Macklem, who explained that it is premature to consider reducing rates at this current juncture. This move directly affects individuals and businesses who borrow or save money, as interest rates dictate the cost of borrowing and the returns on savings.

CBC News conducted interviews to gauge reactions to this decision. An economist offered insights on the possible implications of the steady interest rate for the economy and consumers. Additionally, the news agency spoke with a couple who are under financial stress due to the high interest rates. They shared their concerns that they might be compelled to sell their home if there's no reduction in interest rates in the near future.



Bank of Canada holds interest rates steady

So that's our new total installment. Two years of high interest rates have hit the Dumichel family hard. We completely used up all our savings. We joined the food bank, we took the girls, we had two out of anything extracurricular. The mortgage payments on their dream home have nearly doubled. They lost steady work and could be forced to sell. It's just a combination of hardships right now. You know, like we can probably last for about three more months like this. Many Canadians like them are playing the waiting game. Desperate for lower interest rates. The higher rates have weighed on consumption and investment and you have seen things slow down. The job market is cooler too and inflation has tumbled from its peak. But the Bank of Canada says it's still too soon for rate cuts. The assessment of the governing council is that we need to give higher interest rates more time to do their work. Overall inflation in Canada is at 2.9 percent and some of the core measures the central bank watches are even higher. So interest rates will stay where they are until officials see more progress towards the 2 percent target. Even then, rate cuts could be slow. I think it's very safe to say we're not going to be lowering rates at the pace we raised them. But those high rates are squeezing borrowers. In the latest quarter, missed mortgage payments climbed 52 percent compared to a year ago. Anyone facing mortgage renewal this year will see their bills jump sharply. We've been putting extra away specifically for that reason. To be prepared for rates of six or seven percent even. I'm obviously hoping rates will go down this year. It's hard to tell at this point. I think if they were to start decreasing it would help a lot of people. The Bank of Canada gave few clues about when it could change policy. Though many economists predict the first interest rate cut could come in June. Nisha Patel, CBC News, Toronto.

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Washington

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Zaporizhzhia

Ukraine Invasion

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Council of the City of Sydney

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Bogotá

Israel-Gaza War

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Odesa

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Kharkiv

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Turin

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