Posted October 28, 2026 8:28 am

1 min read

Click to play video: 'To hike or not to hike? Bank of Canada interest rate decision coming Wednesday'

1:36 To hike or not to hike? Bank of Canada interest rate decision coming Wednesday

Economists are widely expecting Canada’s central bank to raise its key lending rate this week, which would lead to a higher prime rate for borrowers and cost variable rate debt-holders more on interest. As Jacqueline Hansen reports, some economists say the Bank of Canada could even hike rates multiple times by the spring.

The Bank of Canada is expected to make an interest rate announcement Wednesday, with many economists predicting a hike for the first time in three years.

The central bank is facing pressure to raise interest rates as the Iran war and other geopolitical conflicts result in higher prices for oil and gas, which is expected to lead to higher prices for goods and services beyond the gas pump.

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Financial markets and a Reuters poll of economists are betting that the central bank will deliver a quarter-point hike to its policy rate, the first increase in the key lending rate since July 2023.

The floor for borrowing rates set by the Bank of Canada has been 2.25 per cent since October 2025, when rates were cut from 2.5 per cent.

Alongside the rate decision, the Bank of Canada will also release updated forecasts for inflation and economic growth.

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– with a file from The Canadian Press

More to come.

© 2026 Global News, a division of Corus Entertainment Inc.

Source: Global News · Ariel Rabinovitch

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