The Bank of Canada raised its key interest rate for the first time in three years. Ask us your questions — SkimNews
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- Bank of Canada raised its benchmark interest rate by a quarter-percentage point to 2.5 per cent on Wednesday, its first major move since the October 2025 cut and its first hike since July 2023.
- Bank of Canada said the increase aimed to prevent high oil prices from becoming a sustained inflation problem, revealing that inflation outweighed growth threats in its policy judgment.
- Macklem spent the past year weighing inflation risks from the Middle East war and its resulting oil spike against growth threats from the trade war with the United States.
- Reuters likewise reported the increase and said another hike was possible, adding a forward-path detail absent from the source announcement.
- Economics reporter Mark Rendell, personal economics reporter Erica Alini and investment editor Darcy Keith will answer questions about the economy, consumers and the housing market on Thursday, Oct. 29 at 3 p.m. ET.
Why it matters: For Macklem, the material choice is explicit: the Bank put inflation risk from the oil spike ahead of growth threats tied to the U.S. trade war. The quarter-percentage-point increase to 2.5% makes that priority explicit, while Reuters’ report of a possible additional hike keeps the policy path open.
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