Insolvencies filed by Canadian consumers jumped by the most in two years amid signs recent interest rate increases are filtering through to the economy.

Insolvencies climbed to 11,641 in October, an increase of 9.2 per cent from a year earlier, according to a report from the Office of the Superintendent of Bankruptcy Canada. Insolvencies surged 16 per cent from September, and are 1.5 per cent higher than 2017 on a year-to-date basis.

The Bank of Canada has raised borrowing costs five times since July 2017, and Governor Stephen Poloz reiterated Thursday rates will need to rise “into a neutral range” somewhere around 2.5 per cent to 3.5 per cent, from the current 1.75 per cent, as the economy operates near capacity. That view was reinforced by data Friday that show the country posted a record employment gain in November.

Still recent declines in residential investment and car sales suggest the higher borrowing costs are already having an impact, with the bulk of the effect still to come. Light vehicle sales dropped the most in almost a decade last month, and growth in residential mortgages has decelerated to the weakest pace since 1982.

Consumer insolvencies rose in every province except Newfoundland and the three northern territories. They surged 20 per cent from a year earlier in British Columbia, 16 per cent in Saskatchewan and 9.8 per cent in Quebec. Nationally, slightly more than half of the insolvencies were so-called consumer proposals, in which the debtor agrees with a creditor to only pay a certain amount of what’s owed, versus bankruptcies.

Business insolvencies, meanwhile, fell 2.1 per cent in October from a year earlier, after rising 18 per cent in September. In total, Canadian insolvencies were up 8.9 per cent in October from a year earlier.