Bank of Canada raises interest rate to 2.5 per cent
The Bank of Canada has raised its key interest rate by a quarter of a percentage point to 2.5 per cent, marking its first increase since July 2023. The central bank says rising energy prices and uncertainty surrounding Canada’s trade relationship with the United States are the biggest risks to the cost of living.
In its October report, the Bank of Canada warned that while higher energy costs have not yet spread broadly across the economy, businesses are facing growing cost pressures and expect to pass more of those expenses on to consumers.
Inflation currently stands at 3.1 per cent. The rate increase is intended to help contain inflationary pressures and prevent higher fuel prices from driving up costs across the broader economy.
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