Bank of Canada raises its benchmark interest rate to 2.5%

Marking the first increase to its policy rate in over three years, the Bank of Canada raised its benchmark interest rate to 2.5 per cent on Wednesday. 

Before the increase, its benchmark interest rate was 2.25 per cent.

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

The bank warns 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.

Macklem says the bank is concerned that prolonged high global oil prices make it more likely for businesses to pass on those higher costs to their customers.

With Files From The Canadian Press

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