Rate bump not necessarily a harbinger of hikes to come

Uncertainty over global economy might ease pressure for future interest rate increases

On the same day the Bank of Canada bumped its key lending rate up, a major chartered bank edged a key mortgage rate down, moves that reflected the continuing uncertainty in world financial markets.

The Bank of Canada on Tuesday became the first G7 central bank to raise interest rates since July 2008, hiking its key overnight lending rate one-quarter of a percentage point to 0.5 per cent in a long-anticipated move aimed at keeping Canada's recovering economy from overheating.

However, with uncertainty over the global economy mounting due to turmoil in the European Union, the pressure for future short-term rate increases might be easing.

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