#higherborrowingcosts; #curbeconomicdemand, #NikNano, #NanosResearch; #Bloomberg, #CentralBankofCanada
Ottawa, May 14 (Canadian-Media): A Nanos Research survey suggested that millennials are already disturbed by higher interest rates and spending less, media reports said.
According to the survey by Nanos Research -- conducted on behalf of Bloomberg between April 28 and May 4 -- more than half of Canadians under 35 years old admitted of spending less because of recent interest rate increases, with 30 percent of respondents report higher rates had a negative impact on their personal spending and with another 23 percent said the effect was somewhat negative.
41 percent, among respondents of all ages, reported at least a somewhat negative effect from higher rates.
The survey suggested higher borrowing costs had not only reportedly begun to curb demand in the economy, but also had underscored how the impacts will reverberate beyond real estate as households offset rising interest payments by cutting back on other things.
Most economists, including those at the Bank of Canada, had begun to anticipate the decline of economy in coming years was primarily due to the slowdown in consumer spending.
“Research suggests that age is a significant determinant of the possible impact of rate hikes on the personal spending of Canadians,” said Nik Nanos, chairman at Nanos Research. “The spending of younger Canadians, under 35 years of age, will likely be squeezed the most.”
Younger Canadians particularly would reportedly be faced with the problem while borrowing to buy into a housing market because if its skyrockeing prices, over the past decade, which had been doubled in cities such as Vancouver and Toronto.
Due primarily to the recent period of extremely low borrowing costs, the Bank of Canada predicted the economy was 50 percent more sensitive than before to rate hikes.
Borrowing costs by Canada’s central bank, had tripled since July, with investors anticipating two more increases later this year.
Some of the other highlights of the poll are: close to one in 10 of the respondents felt rate increases had a positive effect on personal spending, while 47 percent report no impact.
41 percent, of those between 35 and 54 years old, report higher rates having a negative effect.
Those over the age of 55 reported the least negative effects, with for one third higher rates harmed personal spending.
Highest share of negative responses, at 47.9 percent, was felt by Quebec .
Ontario had the lowest, at 33.5 percent, with females, at 42.9 percent more negatively affected than males at 39.8 percent.
The results of the hybrid telephone and online survey of 1,000 Canadians at least 18 years old are reportedly accurate to within 3.1 percentage points, 19 times out of 20.