Bank of Canada expected to hike key rate for 1st time since 2023

Bank of Canada building is pictured in Ottawa on Tuesday, April 28, 2026. THE CANADIAN PRESS/Sean Kilpatrick – The Canadian Press

OTTAWA — The Bank of Canada is widely expected to move its benchmark interest rate this morning for the first time in nearly a year.

Financial markets and a Reuters poll of economists are betting that the central bank will deliver a quarter-point hike to its policy rate, the first increase in the key lending rate since July 2023.

The bank’s policy rate has stood at 2.25 per cent for nearly a year now, a level most economists see as giving the economy a bit of a boost.

But even as a tariff dispute with the United States threatens economic growth, the Bank of Canada has signalled it’s increasingly worried about inflation stemming from war in the Middle East.

Monetary policymakers have said they’d look past the initial inflationary surge tied to rising energy prices but would raise the policy rate if there were signs price pressures could spread beyond the gas pumps.

Alongside the rate decision, the Bank of Canada will also release updated forecasts for inflation and economic growth.

This report by The Canadian Press was first published Oct. 28, 2026.

Craig Lord, The Canadian Press