After announcing a rate hike this week, Bank of Canada deputy governor Paul Beaudry says the central bank plans to take future interest rate decisions one at a time.

Beaudry made the comments in a news conference on Thursday, which followed a speech he delivered to the Greater Victoria Chamber of Commerce.

The deputy governorB次元官网网址檚 public appearance comes one day after the central bank announced it was raising its key interest rate by a quarter of a percentage point, ending its pause on rate hikes and bringing the rate to 4.75 per cent.

The move fuelled speculation among economists that another rate hike is on the way next month, but Beaudry said nothing is predetermined.

B次元官网网址淓very decision is taken one at a time at this point,B次元官网网址� Beaudry said.

B次元官网网址淭hereB次元官网网址檚 a set of data that weB次元官网网址檒l be looking at, we made that clear. And then we let the markets make their bets.B次元官网网址�

The decision to raise interest rates again wasnB次元官网网址檛 completely unexpected, given a recent string of hot economic data. But some economists had expected the central bank to wait a little longer to get more data before hiking rates again.

In an interview with The Canadian Press, Beaudry said the Bank of Canada is facing difficult decisions amid economic uncertainty, which means its moves may surprise people at times.

B次元官网网址淲hen we have difficult decisions B次元官网网址� you take a jump at some point,B次元官网网址� Beaudry said.

B次元官网网址淚tB次元官网网址檚 going to surprise some people.B次元官网网址�

Earlier this year, the Bank of Canada announced it was pausing its rate-hiking cycle to account for the lag that exists between interest rate increases and their effects on the economy.

But economic data released since April B次元官网网址渢ipped the balanceB次元官网网址� for the central bank in favour of raising interest rates again, the deputy governor said in his speech.

B次元官网网址淲eB次元官网网址檝e had an accumulation of evidence B次元官网网址� on many fronts, over time and across a whole set B次元官网网址� that tell us that inflation seems to be more sticky and itB次元官网网址檚 going to be harder to get it down to that two per cent,B次元官网网址� Beaudry said.

B次元官网网址淚tB次元官网网址檚 that accumulation of evidence that brought us to our (rate) decision.B次元官网网址�

Most economists estimate the lag between a rate hike and its economic impact is somewhere between one and two years. The majority of the Bank of CanadaB次元官网网址檚 rate hikes happened less than a year ago, raising the question: why hike rates again?

The deputy governor, who will be leaving his position next month to return to his academic position at the University of British Columbia, said the central bank thinks the economy is too overheated, even when it takes the lags into consideration.

B次元官网网址淲e take into account all those lags, and what we should expect given the lags, and things were kind of more persistent,B次元官网网址� Beaudry said.

In his speech, the deputy governor says stronger growth, a tight labour market, and a rise in inflation in April suggest interest rates were not high enough.

Last week, Statistics Canada reported real gross domestic product grew at an annualized rate of 3.1 per cent in the first quarter.

Beaudry said the rapid rise in consumer spending took the central bank by surprise, while buyers appear to be returning to the housing market.

Progress made on the inflation front was also slightly reversed in April, as the annual rate ticked up to 4.4 per cent.

Meanwhile, the labour market has remained remarkably resilient, with an unemployment rate of five per cent.

B次元官网网址淲hen we looked at the dynamics in inflation combined with excess demand, that really has increased the risk that we are not going to be able to get inflation down without a bit more monetary tightening,B次元官网网址� Beaudry said.

Nojoud Al Mallees, The Canadian Press

Like us on and follow us on .