BoC Raises Rates as Expected

The Bank of Canada (BoC) raised its key overnight rate by 25 basis points to 5.00% yesterday. This increase, which follows a similar one in June (below), was widely expected. The BoC's announcement pointed to stronger-than-expected growth in the economy this year, persistently high consumer spending, elevated core inflation, and continuing tight labour markets as reasons for the hike. The tone of the press release was somewhat hawkish, calling for a return to the 2% target inflation rate in mid-2025 - slower than originally forecast and, even then, subject to qualification. The BoC's announcement is available here.