Changing habits for Ottawa residents as interest rate hikes continue

The relentless rise in interest rates continued Wednesday with the Bank of Canada raising its key interest rate to the highest it has been since 2008.

Now, some people in Ottawa are making changes to deal with the added expense it generates.

"My mortgage has increased overall from the last year and a half by $1,200 which is almost a 25 per cent increase," Sumit Bhutani said. "We have had to do cutbacks, we have stopped going on vacations, eating out less and apart from that my wife has started working contracting jobs so that has helped with the extra income."

The final rate hike of the year saw the key interest rate increase by half a percentage point to 4.25 per cent.

"It impacts everything in our budget, in our monthly budget plus it's impacting our travel a lot,"  Laxmi Bhutani said.

Some economists believe the central bank made the wrong move.

"I absolutely see the hopes of a soft landing have been crushed now," said Sheila Block, a senior economist with the Canadian Centre for Policy Alternatives.

Ontario Premier Doug Ford also weighed in on the hike, saying, "I understand their philosophy they want to cool down inflation but what we're hearing that hopefully in April, May and June we're going to see inflation level off but just increasing interest rates constantly, personally I don't believe in it."

The next rate announcement is expected on Jan. 25, 2023.