Bank of Canada hikes benchmark interest rate for fourth time in a year

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      Things could soon get a little tougher for Canadians carrying large debts.

      That's because the Bank of Canada has increased its benchmark rate by 0.25 percent.

      The so-called overnight rate is 1.5 percent, the highest it's been since December 2008. And it's the fourth increase in a year in response to Canada's growing economy.

      This will likely have an impact on floating mortgage rates and the amount of interest charged on unpaid credit-card balances.

      The Bank of Canada issued a statement that the U.S. economy is "proving stronger than expected".

      This is fuelling expectations that the U.S. Federal Reserve will boost interest rates.

      That, in turn, is pushing up the U.S. dollar in comparison to other currencies, including Canada's.

      "Meanwhile, oil prices have risen," the central bank noted in its statement. "Yet, the Canadian dollar is lower, reflecting broad-based U.S. dollar strength and concerns about trade actions. The possibility of more trade protectionism is the most important threat to global prospects."

      The Bank of Canada pointed out that inflation is close to two percent, which is "consistent with an economy operating close to capacity".