Rate hike isn't needed: economists
The Bank of Canada should not raise rates in light of growing household debt, because debt levels are already on the way down.
A report released on Wednesday from economists Derek Holt and Dov Zigler states that a rate hike is unecessary, as Canadian household debt is already decreasing. In this article from the Ottawa Citizen, we learn that Canadian mortgage debt growth is at a moderate pace, and should allay fears that it is out of control to the point of requiring further monitoring.
It is believed that calculating debt levels factoring in mortgage debt is not realistic, as a mortgage is financed over a large portion of a lifetime and should not be compared to one year of post-tax income. This article also points out that Canadians are managing their debt much more responsibly; using mortgages and Home Equity Lines of Credit rather than higher interest products and accumulating more debt.
Read the full article from the Ottawa Citizen here.