06:52 AM EDT, 08/30/2024 (MT Newswires) -- Canadian insolvencies jumped in July, continuing the recent upswing, noted Bank of Montreal (BMO).

The recovery in insolvencies filed by businesses is unsurprising following the end of COVID-19 pandemic support programs, said the bank.

However, the jump in consumer insolvencies bears "close watching" given concerns about stresses on household budgets in the current high interest rate environment, stated BMO.

It's clear that additional rate cuts can't come soon enough for debtors, according to the bank. While the 50 bps of easing announced so far

are certainly welcome, BMO recalls that mortgage rates will still be higher at renewal for most households over the near term.

That's why the Bank of Canada (BoC) is expected to continue cutting at successive meetings, getting to neutral by the middle of next year, added BMO.