The Bank of Canada raised its key interest rate on Wednesday, lifting the benchmark to 2.5 per cent and leaving the door open to further increases, BNN Bloomberg reports.
The move marks the central bank's first rate hike since 2023, according to the Financial Post. The Bank also indicated that another increase remains a possibility, per BNN Bloomberg.
Coverage of the decision was anticipated ahead of the announcement, with Global News reporting that economists had expected a hike going into the announcement. The full text of the policy decision was also published, CTV News reported.
Alongside the rate decision, the Bank projected that inflation will run higher in 2027, CBC reported. That outlook came as part of the same announcement in which the benchmark rate was set at 2.5 per cent.
The decision is significant because it ends a lengthy stretch without a rate increase, dating back to 2023 as noted by the Financial Post. The combination of a higher benchmark rate and a forecast of elevated inflation in 2027 shapes the backdrop for borrowing costs and price pressures in the years ahead.
What to watch next: whether the Bank follows through with another hike, and how its 2027 inflation projection holds up in subsequent policy updates.
