Bank of Canada poised to hike key rate for first time in three years
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓The Bank of Canada is expected to increase its benchmark interest rate by 25 basis points to 2.5% on Wednesday.
- ✓Many economists said this move helps the bank head off cost pressures.
- ✓"This all leans toward the BoC delivering its first increase since July 2023," experts noted about the change.
Story at a Glance
- Category
- BUSINESS
- Reported By
- Reuters
- Reading Speed
- 3 Minute(s)
- Market Focus
- India Economy
OTTAWA, Oct 28 (Reuters) - The Bank of Canada is widely expected to increase its benchmark interest rate by 25 basis points to 2.5% on Wednesday, in a move seen by most economists as a protection from a possible broader spillover of energy inflation.
A hike would be the central bank’s first since mid-2023 and its first policy change in almost a year.
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It would likely push up bank lending rates and mortgage costs and could slow economic growth. But many economists say it would help the BoC head off cost pressures that are likely to spread from higher gasoline and diesel prices in the coming months.
Nineteen of 34 economists surveyed by Reuters from October 21 to 23 said the bank will hike its overnight rate by a quarter percentage point to 2.50%. A majority also forecast one more rise before March.
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