Business · Economy · 5 hrs ago
Bank of Canada says further rate hikes may be needed
The Bank of Canada says more rate hikes may be needed, but it will decide one meeting at a time.
Last month, it raised its key interest rate by a quarter of a percentage point to 2.5 per cent, its first hike since 2023.
The move was intended to reduce the risk that stubbornly high oil prices lead to persistent inflation.
The council is weighing uncertainties including the Middle East war, Canada-U.S.
trade relations and how businesses and households respond.
The bank cannot lower global energy prices, but it says interest rates can help stop those costs spreading into prices for other goods and services.
It forecasts inflation will reach 3.5 per cent at the end of this year and remain above 3 per cent for much of 2027; businesses surveyed expect to raise some prices over the next year.
The next rate decision is scheduled for Dec.
9.
The Bank of Canada says it may need to raise interest rates further but will proceed carefully.
The governing council raised its key policy rate by a quarter of a percentage point to 2.5 per cent last month.
Council members cited uncertainty about the war in the Middle East, Canada-U.S. trade relations and other factors.
The bank raised its forecast for annual inflation to 3.5 per cent at the end of this year and above three per cent for much of 2027.
The next scheduled rate decision is set for Dec. 9.
- Who
- The Bank of Canada’s governing council.
- What
- It says further interest rate increases might be needed, while stressing a cautious approach.
- When
- The summary was released Tuesday, Nov. 10, 2026. The rate increase took place last month.
- Where
- Canada.
- Why
- To reduce the risk that high energy costs lead to persistent, broad-based inflation.
This story does not have two clearly opposing sides.
The Bank of Canada raised its policy interest rate by a quarter of a percentage point to 2.5 per cent.
The bank released a summary of its governing council’s deliberations, saying further rate increases might be needed.
The Bank of Canada’s next scheduled interest rate decision is set to take place.
- Policy rate
- 2.5 per cent after a quarter-point increase
- Inflation forecast
- 3.5 per cent at the end of 2026
- Inflation outlook
- Above 3 per cent for much of 2027
- Next rate decision
- Dec. 9
- Deliberation summary
- Released Nov. 10, 2026
4 sources
Bank of Canada staying cautious but considering more rate hikes: summary
Further interest rate hikes might be needed: Bank of Canada
Bank of Canada moving carefully, but more hikes might be needed, meeting summary shows
Bank of Canada moving carefully, but further hikes might be needed: meeting summary
What people are saying
Members underlined that their outlook was still subject to considerable uncertainty about the war in the Middle East, Canada‑U.S. trade relations, global financial conditions, the speed and extent of pass‑through and how businesses and households would react to these developments,
They agreed they would need to continue to take these sources of uncertainty into account when setting monetary policy.
With the war in its eighth month and no resolution on the horizon, members exchanged views on whether a higher policy interest rate was needed to mitigate the risk that higher energy costs would spread to other goods and services,