Economists expect Bank of Canada to hike key interest rate by 0.75% on Wednesday
Economists are predicting the Bank of Canada will hike its key interest rate by three-quarters of a percentage point on Wednesday as inflation rages on globally.
Most economists are now forecasting a rate hike of three-quarters of a percentage point, following the lead of the U.S. Federal Reserve, which hiked its key rate by that amount last month. The Bank of Canada has identified both domestic and international factors leading to soaring inflation. Domestically, the bank says there’s excess demand in the economy, while globally, supply chain problems and the war in Ukraine continue to put upward pressure on prices.
“If the bank goes more than 50 basis points, I think the reasoning is they want to … ensure expectations don’t get too wild,” said Gordon.The Bank of Canada’s most recent business outlook survey showed Canadians believe inflation will remain higher than previously expected — and for a while. Canadians expect inflation to be at four per cent five years from now, the survey found.
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