The Bank of Canada raised its overnight interest-rate target by 25 basis points to 2.5% on October 28, citing a more persistent inflation outlook. It set the Bank Rate at 2.75% and the deposit rate at 2.45%.
In its announcement, the central bank said further increases could be necessary, while emphasizing that uncertainty warranted a careful approach. The decision aims to limit the spread of sustained energy costs into other prices.
The bank now projects Canadian inflation averaging 3% in 2027 before returning to 2% around mid-2028. It expects economic growth of 1% this year and 2% in both 2027 and 2028.
For the United States, the statement described continued robust growth supported by consumer spending and artificial-intelligence investment. It said strong U.S. demand had helped Canadian exports, while tariffs remained a source of weakness and uncertainty in Canada’s outlook.
These are the bank’s forecasts and assessment, rather than realized future outcomes. Its next scheduled rate announcement is December 9.
Sources Bank of Canada — October 28 interest-rate announcement: https://www.bankofcanada.ca/2026/10/fad-press-release-2026-10-28/