The speculation is that the Bank of Canada will announce Wednesday that they will increase the basic interest rate from the current 0.5 per cent to 0.75 per cent because they feel the economy has improved enough that we, the people, don’t need those lower rates anymore.
I have only one question: what world do these decision makers live in?
The problem here is that the good folks at the Bank of Canada are number crunchers and for them, this is nothing more than a mathematical exercise.
In the real world, you’d be hard pressed to find too many Canadians who feel that the economy has improved significantly; many are still living paycheque to paycheque — or worse.
In fact, a report released yesterday indicated that if the Bank of Canada raised the interest rate even a quarter percentage point as suggested, 71 per cent of Canadians would find it difficult to absorb the increase.
For some of us, that will mean less disposable income, which means we’ll be buying less or maybe holding off on buying a house or a car or a much needed fridge or stove.
For others, it may force them to choose between making a higher mortgage payment or paying escalating utility bills.
That’s the kind of stuff that could stall a fragile economy.
So tell me Bank of Canada, why this is such a good idea?
Bill Kelly is the host of Bill Kelly Show on AM 900 CHML and a commentator for Global News.