BANK OF CANADA HIKES INTEREST RATES BY BIGGEST AMMOUNT IN 20 YEARS IN PUSH TO TAME RED HOT INFLATION

By Chandrayee Roy Choudhury, Canada:

The Bank of Canada hiked its benchmark interest rate by half a percentage point to one per cent on Wednesday in its latest move to rein in high inflation.

The bank's rate impacts Canadian businesses and consumers by influencing the rates they pay and receive on things like mortgages, GICs and savings accounts.

The bank slashed its rate to barely above zero in March of 2020 when the pandemic began.

While the move helped the economy to weather the unprecedented uncertainty of COVID-19, in recent months, inflation has come roaring back to its highest level in decades, prompting the central bank to start unwinding all that cheap credit.

"Inflation is too high," Bank of Canada governor Tiff Macklem said at a press conference announcing the news. "We need higher interest rates."