On Wednesday, the Bank of Canada raised its key interest rate by 25 basis points bringing the rate to 5 per cent. This is the first time since April 2001 that the key interest rate has been this high. What exactly does this mean for Airdronians and Albertans?

Member of Parliament (MP) for Airdrie Banff Blake Richards explained it can be harder to make bill payments.

"Every time you see these rates increase, it just means that for everyone who's got a mortgage, or someone looking for a new home, life just got that much more expensive. This also applies to any other debts like credit cards."

According to Richards the reason for these increases is because of the recent inflation.

"Inflation has meant these interest rates are increasing and it's hurting a lot of Canadians and their ability to meet their basic needs."

Reportedly, banks like Bank of Montreal, TD Bank, Royal Bank of Canada and CIBC have already announced that they will match their increase effective Thursday.

The Bank of Canada's July Monetary Policy Report (MPR) projects the global economy will grow by around 2.8 per cent this year and 2.4 per cent in 2024, followed by 2.7 per cent growth in 2025. 

"Inflation in Canada eased to 3.4 per cent in May, a substantial and welcome drop from its peak of 8.1 per cent last summer," a press release from the Bank of Canada stated. 

"When a government is essentially, printing money, which is what we saw, spending billions of dollars, this was very predictable," stated Richards.

When asked if we could possibly see an election this year, Richards said it's always possible and if it came down to it, an election could be called tomorrow by the federal government.

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