OTTAWA, June 1, (Reuters) – On Wednesday, the Bank of Canada raised its policy interest rates to 1.5% from 1.0%. This is its second consecutive 50 basis-point increase and it said it was ready to take “more aggressively if needed” in order to return inflation to its target.

Canada’s central bank stated that there was excess demand in Canada and they see inflation rising in the near future. As such, higher interest rates are needed.

The risk of high inflation becoming entrenched is increasing. “The Bank will make use of its monetary policy tools in order to restore inflation to target” it stated in the decision statement.

The bank stated that the “Governing council is ready to act more forcefully if necessary to fulfill its commitment to reach the 2% inflation goal.”

Canada’s April inflation rate climbed to 6.8%, which is a record for the country. Food prices have been rising at an unprecedented pace since 1980s. The central bank’s first 50-bp increase in consecutive days since 2000, when it set its decision dates.