Come October and the beginning of the NHL regular season, will bars and hotels in Canadian cities be seeing the same spend-free crowds they were seeing in April, May, and June or is the party over? What looked like a series of good-natured pats on the back of the loonie in June by bank governor Stephen Poloz and senior deputy governor Carolyn Wilkins now look more like a veiled last call for many consumers. Household spending was up as the bulk of the burden was kept at bay and sectors throughout the economy were feeling the overflow. Along with those comments – and a Prime Minister consis- tently touting a strong, open-door economy at home and abroad in the first half of 2017 – the loonie has started to gain altitude as of late – to heights as far as $0.80 USD in the days before the rate hike announcement, in fact. But if anything, the rate hike means that foreign interest in many of Canada’s markets will increase. Daily loans will be paid back at a higher rate and consumer sentiment is showing no sign of changing for the worse. Source: CBC In late June, only days before the rate hike, Poloz told jour- nalists that 2015’s low interest rates were doing “their job.”
By David MacDonald W ell, it hasn’t done it since 2010, but after months of speculation on Bay Street, the Bank of Canada raised the key interest rate by a quarter of a per- centage point to 0.75. And it’s hard to say at this point how this will impact previous reports by Canada’s central bank which showed that businesses are planning on hiring more – more than they have ever reported in sanctioned surveys, in fact. The indicator, according to the Bank of Canada, is at its highest level since 2011 and sentiment is up on both sides of the dollar. But now that the hike is underway that credit card, that line of credit, that mortgage, that car loan becomes a little more relevant in your day-to- day.
JULY 2017 • SPOTLIGHT ON BUSINESS MAGAZINE
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