“Bank of Canada Worries about Household Debt as Interest Rates Rise”

With rising interest rates, the ability of Canadians to pay their debts is one of the most significant risks to the Canadian financial system, worries the Bank of Canada.

This is one of the conclusions of its review of the financial system 2023, published on Thursday.

The Bank of Canada is particularly concerned about when homeowners will have to renew their mortgages, which will increase the financial pressure on even more people who already have to deal with the rising cost of living.

In response to this report, Senator and economist Clément Gignac believes that the key rate should not be raised during the next decision to be taken on June 7, even if inflation experienced a slight rebound in the month of april.

“It is very important for the Bank of Canada to keep its inflation target of 2%, but instead of hoping to reach it in 2024, we could reach it in 2025 and the sun would continue to rise at still is,” he said.

“It’s still important to gauge monetary policy and price parity, but also the ability of households to absorb these rate hikes,” he continues.

The financial system review also reveals that the Bank remains concerned about the threats to financial stability posed by a major cyber incident.

See the full explanation in the video above.