Facts
- The Bank of Canada raised its overnight rate by 25 basis points, from 2.25% to 2.50%, on Wednesday, October 28, 2026. The Bank Rate rose to 2.75% and the deposit rate to 2.45%.
- The Rio Times reported that the increase ended a run of seven decisions on hold. A Reuters poll published October 23 had forecast the move.
- The Bank said it acted to reduce the risk that high energy prices spread to other goods and services.
- Headline inflation was 3.1% in September, up from 3.0% in August, according to Statistics Canada. Gasoline prices were up 27.8% from a year earlier. Excluding gasoline, inflation eased to 2.2% from 2.4%.
- Inflation has stayed near 3% since April and is expected to reach about 3.5% by the end of the year, largely because of elevated oil prices, the Rio Times reported.
- The Bank’s new forecasts: GDP growth of 1% in 2026 and 2% in 2027 and 2028, inflation averaging 3% in 2027 and returning to 2% by mid-2028, and global growth revised up to 3.1% in 2026.
- The Bank said more increases may be needed, given the uncertainties, and that it will proceed carefully. The next rate decision is on December 9, 2026.
- The Rio Times said the market reaction in the Canadian dollar, bond yields and stocks was not yet verified.
Source Read the Rio Times’s report on the decision here.
Image <a href="https://commons.wikimedia.org/wiki/File:Ottawa_-ON-_Bank_of_Canada.jpg” rel=”noopener” target=”_blank”>Ottawa – ON – Bank of Canada by Wladyslaw, licensed under CC BY-SA 3.0.
