There appeared to be tangible anxiety in the housing market as the September 6 announcement date crept closer. With inflation rising to 3.3% in July and continued housing price increases, it may have seemed that Canadians might be in store for another rate hike. However, with late summer indicators showing the Canadian economy slowing, the Bank of Canada chose to hold the overnight rate at 5.0%.
“With recent evidence that excess demand in the economy is easing, and given the lagged effects of monetary policy, Governing Council decided to hold the policy interest rate at 5% and continue to normalize the Bank’s balance sheet. However, Governing Council remains concerned about the persistence of underlying inflationary pressures, and is prepared to increase the policy interest rate further if needed. Governing Council will continue to assess the dynamics of core inflation and the outlook for CPI inflation. In particular, we will be evaluating whether the evolution of excess demand, inflation expectations, wage growth and corporate pricing behavior are consistent with achieving the 2% inflation target. The Bank remains resolute in its commitment to restoring price stability for Canadians.” -Bank of Canada
This means that the prime mortgage lending rate remains at 7.2%.
The next scheduled rate announcement is October 25, 2023.