CIBC economist says rate hike probably 'unnecessary'

​A prominent CIBC economist said the Bank of Canada could raise its benchmark interest rate again after Wednesday’s hike to five per cent – and that move could be a mistake.

Andrew Grantham, senior economist at CIBC Capital Markets, wrote last month that elevated interest rates could be cooling the economy more than is immediately apparent, meaning June’s rate increase “was at best unnecessary, and at worst a mistake.”

He told BNNBloomberg.ca on Wednesday that he stands by that position following the central bank’s decision to tighten further.

While Wednesday’s policy move wasn’t a surprise, Grantham noted that the central bank maintained its overall tough stance despite some positive economic trends emerging.