Bank of Canada increases interest rate by 0.25% to tackle inflation concerns

The Bank of Canada has increased the interest rate by 0.25 percent today.

This is the first hike since January this year.

After the new rate hike, the central bank's prime interest rate has risen to 4.75 percent.

This has made all types of loans expensive.

In March this year, the central bank put a conditional pause on rate hikes and predicted that the Canadian economy would slow under the measures taken to control inflation, but the economy in the first quarter of this year was much stronger than the central bank's estimate. After which the interest rate has been increased again.

The central bank had expected the economy to grow at an annualized rate of 2.3 percent in the first quarter, but it came in at 3.1 percent.