By Sumayya
OTTAWA — The Bank of Canada is widely expected to change its main interest rate this morning for the first time in almost a year.
Financial markets and a Reuters poll of economists are betting that the central bank will raise its policy rate by a quarter of a
percentage point. This would be the first increase in the main lending rate since July 2023.
The bank’s policy rate has stayed at 2.25 per cent for nearly a year now. Most economists believe this specific level has been
giving the economy a small boost.
However, even though a tax dispute with the United States threatens economic growth, the Bank of Canada has indicated that it is
getting more worried about inflation caused by war in the Middle East. Financial policymakers have stated they would ignore the
initial jump in inflation linked to rising energy costs, but they would raise the policy rate if there were signs that price pressures
could spread beyond gas stations.
Along with the rate decision, the Bank of Canada will also release its latest predictions for inflation and economic growth.
