Further interest rate hikes possible: Bank of Canada

The Bank of Canada’s governing council says it may need to raise interest rates further but it’s proceeding cautiously.

Faced with significant uncertainty, the council says it would take its monetary policy decisions one meeting at a time. 

Last month, the Bank of Canada increased its policy interest rate by a quarter of a percentage point to 2.5 per cent.

This marked the central bank’s first policy change in nearly a year and its first rate hike since July 2023. 

The bank warned that Canadians could soon face higher prices.

Driven mainly by conflict in the Middle East, escalating cost pressures are building within the economy, according to Bank of Canada governor Tiff Macklem.

The report says consumer prices haven’t reflected rising costs yet, but the bank’s surveys suggest that businesses expect to raise some prices over the next year.

With Files From The Canadian Press

READ MORE: Bank of Canada raises its benchmark interest rate to 2.5%