RBC: Lending Costs Set to Go up Late Next Year

X

Hello there! You are new here, you might want to subscribe to our email Newsletter for our Daily Updates.

The Royal Bank of Canada (RBC) noted that Canadians can expect to be hit by higher interest rates in the second half of 2010, and in 2011. RBC economists note that the Bank of Canada will be among the next group of central banks to move away from low rates, with the Canadian bank’s overnight rate finishing 2010 at 1.25%.

It is believed by RBC economists that the trend setting rate can rise as much as 3.5% in 2011.

The bank rate has been at the historic low of 0.25% for most of 2009, which has encouraged borrowing however it has raised many concerns that Canadians are overextending themselves.

RBC has noted that with expected growth rates of 2.6% next year and 3.9% in 2011, Canada will be leading the G7, particularly the U.S., in recovering from the deep recession.

The RBC report also suggests that stimulus spending will occur in 2010, with improving credit conditions fuelling growth next year and in 2011.

Consumer spending is also projected to increase by 2.3% before accelerating to 2.7% in 2011.

With rates expected to g up in the second half of 2010, and in 2011, you should lock in the mortgage rate and any other borrowing rate while you can in order to avoid missing out the low rates we have seen for the past few months.

Related Posts

• Canada Going Through Slow Growth
• Canadians Slow Down on Borrowing
• Bank of Canada Increases Key Interest Rate
• RBC and BMO Decrease Mortgage Rates
• Canada on Track for Fast Growth