Bank of Canada hikes key rate by 25 basis points to 2.5%
The Bank of Canada raised its overnight rate by 25 basis points to 2.5% on October 28, 2026, citing higher and more persistent inflation.
1 h ago32 min read
Businesses plan to pass along more cost increases, Macklem says
Bank of Canada Governor Macklem said business surveys show firms intend to pass on more cost increases. Rogers said the bank debated a hike and a hold.
28/10/2026 15:123 min read
- Energy costs have stayed elevated for 8 months and appear unlikely to come down soon.
- Investment in the energy secretary is also increasing.
- Businesses can absorb higher costs for a while, but eventually they pass those costs along.
- The surveys indicate that companies are planning to pass on a bigger share of these cost increases.
- Even at current rates, the Bank's policy rate is low enough that it is not restraining growth.
- There is no predetermined path for interest rates.
- Additional rate hikes may still be needed, although uncertainty is considerable.
- Decisions will be made one at a time, based on the incoming data.
- Inflation now looks less likely to be well contained.
- Rogers said, "We debated a hike and a hold."
- Rogers said, "There was a very strong consensus."
- Rogers added, "What drove the decision was a shift in the balance of risks on inflation."
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