Canada’s big banks were quick to announce increases to their prime lending rates to 3.2% Wednesday.

The Bank of Canada increased its overnight target rate to 1% despite expecting growth to moderate in the second half of 2017, noting that GDP is higher than it had expected.

The first of the country’s largest lenders to add a quarter of a percentage point to its prime rate was RBC but TD, Scotiabank, CIBC and BMO followed shortly afterwards.

By the end of Wednesday more lenders had announced an increase including National Bank and HSBC.

Although there was no detailed monetary report from the BoC, Brian DePratto, senior economist at TD Economics says that the BoC’s announcement suggested that unless there is a “significant shock” for the economy, “today's rate increase will be part of a larger and longer march towards interest rate normalization.”

The next interest rate decision will be on October 25 when the next Monetary Policy Report will also be published.

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