1/3 of Canadians fear bankruptcy ahead of Bank of Canada rate decision
Canadians are growing increasingly anxious about their ability to handle higher interest rates, with a new survey showing a rising proportion of consumers fear they will be pushed over the brink.
Indeed, one-third of respondents to an Ipsos survey conducted on behalf of MNP said they’re concerned higher interest rates could push them toward bankruptcy, marking a slight uptick since the previous survey in June. Meanwhile, almost half of respondents (45 per cent) said they’re already feeling the effect of higher rates.
“With little decrease in household debt and the pace of rate hikes expected to accelerate, we will likely see a more immediate and significant effect on borrowers with rate increases in the future,” said MNP President Grant Bazian in a release.
The reality of higher rates is expected to be on full display Wednesday, with investors almost universally expecting the Bank of Canada will raise its benchmark interest rate to 1.75 per cent from 1.5 per cent. The bank has already raised that main policy rate four times since the summer of 2017.
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According to the most recent data from Statistics Canada, a closely-watched measure of household debt burdens showed that, on average, Canadians owed $1.69 for every dollar of disposable income in the second quarter of this year.
The Ipsos survey was conducted between Sept. 10 and Sept. 17, and 2,003 Canadians participated.
Source: BNN Bloomberg
