BoC preview: What to expect from Wednesday’s huge decision
Is a hike in store on Wednesday?
The Bank is at an “inflection point” as its next decision looms, according to Royal Bank of Canada (RBC) Economics, whose economists now say a quarter-point hike is the likeliest outcome from Wednesday’s meeting.
Still, that’s by no means a surefire thing. RBC’s Frances Donald (chief economist) and Nathan Janzen (assistant chief economist) see an almost equal probability that the BoC will hold steady this month but signal a rate hike on the way in December or January.
Canada Mortgage and Housing Corporation (CMHC) chief economist and senior vice president Mathieu Laberge, meanwhile, doesn’t expect a hike between now and the end of the year – but said he anticipates the BoC will begin raising interest rates at some point in 2027, potentially in the spring.
But 19 of 34 economists polled by Reuters last week see a central bank rate jump to 2.50% on Wednesday, with a majority also pencilling in a further increase before March.
The main reason for the sudden prospect of a rate hike is concern about the national inflation outlook. The consumer price index (CPI) ticked higher last month, hitting 3.1% as surging fuel prices pushed prices higher.
