Bank to finally hike with inflation risks too great to ignore

The shift in the Bank of Canada’s language towards emphasising inflation risks from higher oil prices and downplaying the growth impact of new tariffs suggests a 25bp hike, to 2.50%, is finally on the way. However, we still think excess capacity and trade uncertainty will keep the Bank from delivering the four hikes investors seem to expect by end-2027.

We will be reacting to the meeting in an online briefing at 5pm GMT/1pm ET on Wednesday 28th. Register here.