3 publishers · first seen Mon, 26 Oct 2026 20:12 UTC · updated Sat, 31 Oct 2026 09:00 UTC
The Bank of Canada raised its policy interest rate by 25 basis points on Oct. 28, 2026, marking its first increase since July 2023. The overnight rate now stands at 2.5%. The decision follows rising global oil prices and concerns that higher energy costs could lead to broader inflation. Consumer Price Index inflation is expected to remain above 3% through late 2027 and not return to the 2% target until mid-2028.
The bank projects Canada’s economy will grow 2% in 2027 and 2028, despite higher borrowing costs and weak housing investment. Shelter inflation is forecast to rise to 2% in 2027 and stay near that level into 2028, driven by higher construction, maintenance and borrowing costs. Variable-rate mortgage holders may see higher payments, while fixed mortgage rates are not directly affected by the policy change.
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