Bank of Canada Weighs Rate Hike From 2.25% as Inflation Hits 3.1%
Updated
Updated · The Globe and Mail · Oct 28
Bank of Canada Weighs Rate Hike From 2.25% as Inflation Hits 3.1%
3 articles · Updated · The Globe and Mail · Oct 28
Summary
Wednesday’s Bank of Canada decision will determine whether the policy rate stays at 2.25% or begins a new tightening cycle after three years.
3.1% inflation in September — pushed up by energy prices — is testing the bank’s aim of returning inflation to its 2% target within six to 12 months.
Higher rates would quickly raise borrowing costs for variable-rate mortgages and home-equity credit, while fixed-rate borrowers renewing loans are already facing steeper terms.
$2.64 trillion in consumer debt, 6.5% unemployment and two straight monthly job losses — 68,000 in September after 42,000 in August — leave households more exposed to any increase.
The decision lands as Canada also faces softer housing demand, rising mortgage stress and 2.35 million monthly food bank visits, underscoring the trade-off between curbing inflation and protecting living standards.