Investing.com - The Bank of Canada raised interest rates on Wednesday, saying that growth in the country’s economy is becoming more broad-based and self-sustaining.
The BoC raised the cash rate to 1.0% from 0.75% previously. It also raised the bank rate to 1.25% and the deposit rate to 0.75%.
In a statement, the bank said consumer spending remains robust, underpinned by continued solid employment and income growth.
"Given the stronger-than-expected economic performance, Governing Council judges that today’s removal of some of the considerable monetary policy stimulus in place is warranted."
The bank said it continued to expect a moderation in the pace of economic growth in the second half of the year, but said the level of GDP is now higher than it had expected.
The BoC hiked rates for the first time in seven years at its previous meeting in July and indicated that it could do so again in the coming months.
The odds of a hike as early as this week jumped to 41% after data late last week showed Canada's economy grew 4.5% in the second quarter, the fastest rate in almost six years.
Prior to the July move the bank had kept rates unchanged since two rate cuts in 2015 and the prolonged period of low borrowing costs has been blamed for helping inflate the housing market, particularly in Toronto, Canada's largest city.