According to the Royal Bank's Financial Markets Monthly, May 2007 edition, the bank of Canada's overnight lending rate is expected to go up in December of this year. The Canadian economy grew by 0.4% or double the expected rate in February 2007. The economists at Royal Bank attribute increased wages, a tight labour market, and a larger-than-expected growing core inflation numbers to a growing interest rate.
Given that Saskatchewan is experiencing ALL TIME HIGH year-over-year wage growth at 7.6%, one would expect prices on most goods to rise shortly thereafter.
As well, year-over-year retail sales are up by 8.7%, meaning Saskatchewanians are spending more of their money.
I predict the not much social movement or concern with such a small rise in rates. Possibly a headline on the paper or evening news about "rising interest rates," but not much beyond that. Someone may talk about homes or cars becoming more expensive over time, but then the subject will be dropped.
Interest rates should not be a barometer of Canadian fiscal health, but society likes to view it that way. To understand what I mean, check out the intelligent comment by anonymous on my Saskatchewan Real Estate entry. Thanks for that by the way, whoever you are.
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