{"id":942619,"date":"2026-10-22T23:10:13","date_gmt":"2026-10-22T23:10:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/942619\/"},"modified":"2026-10-22T23:10:13","modified_gmt":"2026-10-22T23:10:13","slug":"breathe-easy-for-now-but-economist-says-interest-rate-hikes-coming","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/942619\/","title":{"rendered":"Breathe easy for now but economist says interest rate hikes coming"},"content":{"rendered":"

Article content<\/p>\n

OTTAWA \u2014 Canadians expecting higher borrowing costs next week can likely breathe a sigh of relief, but not for long.<\/p>\n

Article content<\/p>\n

With the Bank of Canada set to announce its key interest rate next Wednesday, RSM Canada Chief Economist Tu Nguyen expects the rate to hold fast at 2.25% \u2013 but she says the central bank\u2019s first rate hike since 2023 could come as early as December.<\/p>\n

\u201cThe Bank of Canada has a little bit of room to wait, but they will be hiking very soon,\u201d she told the Toronto Sun.<\/p>\n

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We apologize, but this video has failed to load.<\/p>\n

Play VideoStatCan data shows inflation on the rise<\/p>\n

New data released Monday by Statistics Canada<\/a> put the consumer price index (CPI) increasing 3.1% year over year in September, up from 3% in August \u2013 largely due to skyrocketing gasoline prices, which increased 27.8% from this time last year.<\/p>\n

\u201cPrices for energy accelerated in September, rising 19% year over year following a 15.4% gain in August,\u201d the report read.<\/p>\n

\u201cCrude oil prices increased in September, reaching their highest level since May amid ongoing uncertainty about the wars in the Middle East, resulting in higher prices for gasoline and fuel oil.\u201d<\/p>\n

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Taking gas prices out of the equation, September\u2019s CPI increased by 2.2% after going up 2.4% in August \u2013 which government officials told the Sun on Monday is within the central bank\u2019s target range.\u00a0\u00a0<\/p>\n

Read More<\/p>\n

\"Gas <\/p>\n

Gas prices accelerate September inflation rate to 3.1%<\/p>\n

<\/a> \"Minister <\/p>\n

Carney government to unveil 2026 federal budget on Nov. 5<\/p>\n

<\/a>When will interest rates increase?<\/p>\n

Nguyen cited two main factors that are allowing the Bank of Canada to buy some time before a potential rate hike: a sputtering job market \u2013 Canada shed 68,000 jobs in September alone \u2013 and the aforementioned modest inflation once gas is stripped out.<\/p>\n

The worry, however, is how long that lasts.<\/p>\n

\u201cThe longer oil prices stay high \u2026 the inflationary impact of oil prices will spill over to the rest of the economy, and that is what\u2019s worrying the central bank,\u201d Nguyen said.<\/p>\n

She said RSM\u2019s forecasts suggest the central bank may start raising rates in December or January \u2013 no mega-hikes but in measured quarter-steps, possibly reaching 3.25% by the end of next year.<\/p>\n

bpassifiume@postmedia.com<\/a>
X: @bryanpassifiume<\/a><\/p>\n

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