From CBC News:
Central banks cut their rates when they want to stimulate the economy by encouraging people and businesses to borrow and invest. And they raise their rates when they want to make borrowing more expensive, to try to cool down an over-heated economy.
That’s an apt description of economies around the world right now, as the cost of living is going up at its fastest pace in decades.
Canada’s inflation rate is at a 31-year-high of 6.8 per cent and is expected to increase when the latest numbers come out next week.
The Bank of Canada has raised its interest rate three times already this year, from 0.25 per cent at the start of the year to 1.5 per cent now, in an attempt to cool things down.