Bank of Canada raises key rate by 25 bps to 2.5%

 The Bank of Canada (BoC) announced on Wednesday its decision to raise the target for the overnight rate by 25 basis points to 2.50%. The Bank Rate was increased from 2.50% to 2.75%, and the deposit rate from 2.20% to 2.45%. It is the first rate hike the BoC has implemented since July 2023.

In its latest report, the BoC said that inflationary pressures persisted, prompted by the ongoing spike in oil prices. It noted that higher fuel prices have increased production and transportation costs and, hence, driven up imported industrial and electronics prices, as well as expectations for household inflation. Still, it also insisted that the Canadian economy remained resilient.

The BoC predicted inflation will average 3% in 2027, raising the July projection upward by a percentage point, and return to 2% in 2028. It estimated the economy will grow by 1% in 2026, and 2% in 2027 and 2028.

https://breakingthenews.net/Article/Bank-of-Canada-raises-key-rate-by-25-bps-to-2.5/67421314