Millennials are already feeling the pinch of higher interest rates and spending less

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A survey found that 30 per cent of Canadians under 35 say higher interest rates are having a negative impact on their personal spending.David Paul Morris/Bloomberg files

More than half of Canadians under 35 years old said they are spending less because of recent interest rate increases, according to a survey by Nanos Research.

Some 30 per cent of respondents in that bracket report higher rates are having a negative impact on their personal spending, with another 23 per cent saying the effect is somewhat negative. Among respondents of all ages, 41 per cent reported at least a somewhat negative effect from higher rates. Nanos conducted the polling on behalf of Bloomberg between April 28 and May 4.

The survey suggests that higher borrowing costs are already beginning to curb demand in the economy. It also underscores how the impacts will reverberate well beyond real estate as households offset rising interest payments by cutting back on other things. A slowdown in consumer spending is the primary reason why most economists — including those at the Bank of Canada — are anticipating the economy is poised to drop off in coming years.

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