Bank of Canada lifts benchmark rate to 2.5% as inflation persists
The Bank of Canada said it raised its key policy rate by 25 basis points to 2. 5% on 28 October, signalling that further hikes may be needed to bring inflation, which has been pushed higher by rising energy costs, back to target. The central bank also released revised inflation and growth forecasts, Global News reported. Analysts had earlier predicted a rate increase as oil prices surged, The Globe and Mail reported. Some Canadian economists warned the move could be premature given weak growth and limited inflation pressure, according to the Financial Post.
The expected hike was projected to raise payments on variable-rate mortgages, lines of credit and auto loans while boosting returns on savings accounts and bonds, The Globe and Mail noted. At the same time, analysts said the U. S. Federal Reserve was expected to keep its policy rate unchanged, also reported by The Globe and Mail.
