Top Canadian banks raise prime rates after central bank rate hike

FILE PHOTO: A Bank of Montreal (BMO) sign is seen outside of a branch in Ottawa, Ontario, Canada, August 23, 2016. REUTERS/Chris Wattie/File Photo

(Reuters) - Major Canadian banks on Wednesday raised their prime lending rates, a benchmark for a wide range of consumer and commercial loans, after the country’s central bank raised interest rates for the third time in seven months.

Bank of Canada increased interest rates to 1.25 percent as job growth and firmer inflation outweighed the cloud of NAFTA uncertainty.

Banks including Toronto-Dominion Bank TD.TO, Bank of Montreal BMO.TO, Royal Bank of Canada RY.TO, Canadian Imperial Bank of Commerce CM.TO and Scotiabank BNS.TO raised their prime rates to 3.45 percent from 3.2 percent.

A higher prime rate will translate to higher interest rates on a wide range of loans that are keyed off the rate, including small business loans and some credit card loans.

Reporting by John Benny in Bengaluru; Editing by Savio D’Souza