The Bank of Canada has raised its key interest rate as expected to 0.75% – the central bank’s first move upward in the cost of borrowing in seven years.

The bank’s target for the overnight rate – at which major financial institutions make one-day loans to each other – moved up by 1/4 of a % from .50 %.

The move means consumers will likely pay more for borrowing such as variable-rate mortgages and lines of credit. With the Canadian economy as a whole performing well, the bank has also nudged up its forecast for growth this year. The bank said real gross domestic product (GDP) is now expected to grow by 2.8% in 2017, up from the April outlook of 2.6%.

Many chief economists for Canada’s major banks move signals a turning point to a longer – term trend in rising interest rates, and that they expect to see more rate hikes moving forward.  Any future changes to the central bank’s  interest rate will depend on economic data in the months ahead. The bank’s next decision on interest rates is scheduled for September 6.

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