Policy rate heading toward 5%

The data released this week showed that higher interest rates are yet to have much of a negative impact on construction or consumption and that core inflation is proving stickier than anticipated. This has prompted us to upgrade our forecast for the Bank of Canada’s terminal policy rate to 4.75%, from 4.0%.

Canada Drop-In (26^th October): We’re holding a briefing on the Bank of Canada decision shortly after the Wednesday 26^th policy announcement. Register to join our discussion about how close the Bank might be to pausing its tightening cycle, housing market risks and whether interest rates could be cut next year. Register now.