Bank of Canada makes 1st jump in interest rates in 7 years

Overnight, the Bank of Canada increased its interest rates from .25% to .75%. It's the Bank's first increase in seven years.

Bank of Canada increases overnight rate target to 3/4 per cent; Governor Poloz to speak at 11:15: https://t.co/W989mQik5N

— Bank of Canada (@bankofcanada) July 12, 2017

Between July 11th and July 12th, the rate rose from .50% to .75%.

The last time the rate increased was in September of 2010 when rates increased from .75% to 1%.

The Bank of Canada based the increase on data showing an outlook for potential growth and "the absorption of excess capacity in the economy," said a spokesperson for the Bank of Canada.

The Bank of Canada suggested that the global economy is growing at a steady rate and that Canada's economy has been "robust, fueled by household spending."

The Bank credits the soft inflation due to heightened food price competition, electricity rebates in Ontario and changes in automobile pricing.

The Bank predicts inflation to return to about 2% by the middle of next year.

Look for a full update on the Bank's economy outlook on October 25th, 2017.

What this means for Canadians is that mortgages, credit cards and other banking transactions may cost an extra $100 per month.

Overnight, the Canadian dollar also went up six tenths of a cent. (Charts are in US dollars)

Updates will continue, as the Bank of Canada is holding a press conference later this morning.