Thursday, July 24th12°C
22715
22455

Carney says warnings are working

The Bank of Canada's warnings about coming interest rate hikes may already be reaping benefits, including changing the behaviour of consumers, governor Mark Carney says.

The central banker says in a speech about the advantages of signalling future intentions, and its limitations, that his persistent warnings about future interest rate hikes may be influencing the types of mortgages homebuyers are acquiring.

He noted that the share of fixed-rate mortgages has almost doubled to 90 per cent this year, with a corresponding decline in variable-rate mortgages.

The central bank has not deviated from the one-per-cent policy rate since September 2010, but in the past year has warned that its next move, whenever it comes, will most likely result in higher rates.

"Our guidance indicates that some policy action may be necessary, encouraging a degree of prudence in household borrowing," Carney said in the speech to Toronto financial analysts.

"The share of new fixed-rate mortgages has almost doubled to 90 per cent this year, reflecting the combination of attractively priced fixed-rate mortgages and the tightening bias of the Bank of Canada."

Carney's reasoning is that the more transparent a bank is about its future intentions, the more likely players in the economy will act according to expectations.

The Canadian Press


Read more Business News

22447


Recent Trending




Today's Market
S&P TSX15394.38+79.25
S&P CDNX1012.231.35
DJIA17086.63-26.91
Nasdaq4473.697+17.681
S&P 5001987.01+3.48
CDN Dollar0.9325+0.0001
Gold1313.40+4.2001
Oil104.30-0.29
Lumber332.40-0.90
Natural Gas3.767+0.005

 
Okanagan Companies
Pacific Safety0.200.00
Knighthawk0.01-0.005
QHR Technologies Inc1.15-0.04
Cantex0.08+0.02
Anavex Life Sciences0.325-0.005
Metalex Ventures0.07+0.005
Russel Metals35.65+0.05
Copper Mountain Mining2.76-0.07
Colorado Resources0.2150.00
ReliaBrand Inc0.10+0.019
Sunrise Resources Ltd0.025-0.005
Mission Ready Services0.19+0.01

 



22563

FEATURED Property
199281310-185 Taylor road
3 bedrooms 2 baths
$199,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Labour shortage in BC

The mainstream media are finally waking up to something unusual in British Columbia – a labour shortage. If the experience of Alberta is a guide to our own future, the highly skilled labour will...


Learn to delegate effectively

Photo: ContributedI have the pleasure of witnessing people delegate tasks quite often. Sometimes with tremendous success and sometimes with disastrous consequences. I have chaired a lot of committees...


Euro debt woes re-emerge

Big Picture Euro debt woes re-emerge Europe’s debt woes jumped back into the headlines this week trumping other economic, geopolitical and corporate developments. Word that one of Portugal&rsquo...

_








Member of BC Press Council


22097