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OECD calls for hike in Canadian interest rates

Published by Steve Coleman on May 22, 2012

A Paris-based economic organization is calling for the second time in as many years for the Bank of Canada to hike interest rates one-quarter of one per cent.

The Organization for Economic Co-operation and Development said May 22 that Canadian interest rates should start rising as early as this fall into the 2.25 per cent range in time for the end of 2013.

While the organization sent out the same message a year ago, the Bank of Canada has opted to keep rates locked into one per cent since September 2010.

The OECD says it expects the Canadian inflation rate to start beating the central bank's two per cent target by the end of 2013.

Both senior government officials and Bank of Canada Governor Mark Carney have been warning Canadians in recent months to take a very close look at their personal debt levels. People have been using the low interest rates as an opportunity to buy homes. As a result, personal debt is nearing 150 per cent of personal incomes.

The OECD says continuing financial problems in Europe could also pose a threat to Canadians' own financial situations. A CTV News story looks at the situation.


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