Inflation has people on guard. “Your dollar doesn’t go as far as it used to,” said Judy Kavanaugh
The power of your dollar could be weakened this week if the Bank of Canada goes forward with plans to increase its key interest rate. Increasing its benchmark rate to 5% would mark a 22-year high
“It’s definitely challenging,” said Komail Zaidi, treasury director at WFCU Credit Union. “It’s a complex environment in the world ALM (Asset Liability Management). We have to balance both sides of the balance sheet.”
According to Fred Bouzide, owner of Fred’s Farm Fresh, people aren’t buying as much as they used to, thanks to the current economic environment
“It’s a tough situation for the people especially if they have four, five kids,” said Bouzide. “They all want to feed them some nice fruit and things like that and at $5 to $6 a pound, they can’t afford it.”
Bouzide said he takes advantage of opportunity buys in the U.S., which allows him to pass on some savings to his customers. “We’re trying to do our best.”
Officials at the UHC Hub of Opportunities are doing their best not to worry about a hike in interest rates
“We’re going to be definitely concerned, and anticipate we’re going to see more and more people,” said Lynda Davidson, Food Bank coordinator
The number of first time users of the food bank so far this year is up 26 per cent over the same period last year. An increase in demand would come at a time summer donations are down
“We need those donations,” Davidson said. “That helps us sustain throughout the month.”
High interest rates also affect the automotive market, but Brad Wipp, general sales manager at Premier Chevrolet, said sales in the used vehicle market are not slowing down
“We’re seeing less people financing used cars, but again, it’s not a big concern because supply and demand is still out there,” Wipp said. “The demand is still out there for late model used vehicles.”
Interest rates are impacting home sales. Both prices and the number of homes sold dropped last month
“I don’t think it has a huge impact on the market because I think people have gotten used to the fact they’ve been rising over the last 18-20 months,” aaid Mark Lalovich, president of the Windsor-Essex County Association of Realtors
Komail Zaidi, treasury director at WFCU Credit Union, said there are things people can do to help cushion the impact of increased rates, “They can pay down their high interest debt. Explore fixed rate options. Get out of your variable rate loans or mortgages.”
Zaidi said the best thing to do in the meantime is stick to the basics, “Try saving. Managing your expenses at this time because the cost of borrowing is going to hit everyone. The timing might be different depending on what sort of loan product you are in.”
