Bank of Canada expected to hike rate on Wednesday to stem spillover of energy inflation
Markets now price in a nearly 80% chance of a quarter-point increase as officials worry higher energy costs could spread into broader inflation.
- On Wednesday, the Bank of Canada is expected to raise its overnight rate by 25 basis points, marking its first increase after holding rates steady at 2.25 per cent for seven consecutive meetings.
- Rising gasoline prices pushed annual inflation to 3.1 per cent in September, with BoC Governor Tiff Macklem warning from International Monetary Fund meetings in Bangkok that persistently high global energy prices will drive up the inflation outlook at home.
- Financial market odds for a rate hike stood at nearly 78 per cent as of Friday afternoon, according to LSEG Data & Analytics, while RBC economists said they have very low conviction on a hike.
- The labour market stalled for a second month in September, with the economy losing 68,000 positions, prompting many economists to cite economic weakness as a reason for concern about rate hike timing.
- Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce, warned that moving early could be a step the bank comes to regret, citing uncertainty about whether rate hikes will be warranted in the coming year.
19 Articles
19 Articles
Economists expect a quarter-point increase by next January.
Bank of Canada expected to hike rate on Wednesday to stem spillover of energy inflation
The Bank of Canada will likely raise its benchmark interest rate by 25 basis points on Wednesday as a pre-emptive move to stop energy-led inflation from spreading to the rest of the economy, according to money markets and economists.
What to expect from October's Bank of Canada interest rate update
The Bank of Canada (BoC) will announce its October interest rate update on Wednesday, and Canadians will be watching to see if any changes are on the horizon. As a refresher, the Bank of Canada held its key interest rate at 2.25 per cent again in September, where it has remained steady over the course of 2026. The Crown corporation said its decision to hold the rate last month was based on several economic factors, including ongoing conflict in …
More and more observers expect the Bank of Canada to raise its policy rate this week, while it needs to assess the impact of rising energy prices on the economy.
St Catharines Standard
Bank of Canada now expected to hike key rate as it faces ‘pivotal decision’
Expectations are rising that the Bank of Canada will indeed raise interest rates this week as it considers the effect of higher energy prices on the economy.
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