Big banks raise prime rate after BoC hike

Many of Canada’s largest banks are increasing their prime interest rate by 25 basis points following the Bank of Canada’s rate announcement.

The central bank said Wednesday it was increasing its key rate by a quarter of a percentage point to 0.5% in a bid to help fight inflation, which is at its highest level since 1991.

TD, RBC, BMO, CIBC, Scotiabank, Desjardins, Equitable Bank and Laurentian Bank said Wednesday they’re pushing their prime rates to 2.70% from 2.45%, effective March 3.

The rise in rates will increase the cost of loans such as variable-rate mortgages that are linked to the benchmark, but won’t directly affect fixed-rate mortgages.

Other banks are expected to follow with rate increases as well.

The Bank of Canada said it would likely need to raise rates further to reduce inflation, which hit 5.1% in January.

Staff, with files from The Canadian Press

The Canadian Press is a national news agency headquartered in Toronto and founded in 1917.