Key facts
- Majority of economists polled by Reuters expect Bank of Canada to hike rates by 25 basis points to 2.50% on Oct. 28.
- A further rate increase is anticipated by the end of March.
- Inflation rose to 3.1% in September.
- Recent business and consumer surveys indicate rising inflation expectations.
- Economic growth forecast at 1.3% in the current quarter, 1.0% in 2026 and 1.7% in 2027.
The Bank of Canada is expected to raise its key interest rate by 25 basis points to 2.50% on October 28, with a further hike anticipated by the end of March, according to a majority of economists polled by Reuters. This move is intended to preempt further increases in inflation expectations, which have risen sharply according to recent business and consumer surveys. Inflation stood at 3.1% in September, slightly above the BoC's target range. Governor Tiff Macklem's recent remarks have been interpreted as a signal of an impending rate increase, leading to a significant shift in market expectations.