While investors await for the Bank of Canada’s interest rate announcement on Wednesday, expectations for a rate cut will be very slim. The BoC is still concerned with Canadian household debt and its all-time high levels. According to MNP accounting firm, nearly half of Canadians are facing a debt trap, according to a new survey that thrusts highly-leveraged households into the spotlight, forty-seven per cent of respondents to a survey conducted on behalf of MNP said they don’t expect to be able to cover basic living expenses over the next year without taking on more debt.
In the most recent official speech by a member of the Bank’s governing council on Sept. 5, Deputy Governor Lawrence Schembri said elevated household debt levels “remain the main risk to Canadian financial stability.” He also pointed out, however, that current tighter mortgage rules are helping to improve the quality of that debt.
Therefore its going to be a wait and see situation on Wednesday.
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