The Bank increased its overnight policy interest rate this morning by 25 bps, with the Bank Rate now at 4.50%. Although inflation fell in December, it remains higher than the BOC target due to a series of global supply disruptions, and elevated commodity prices post-pandemic. Economic growth is expected to stall through the first half of this year as the effects of higher interest rates spread through the economy. The BOC will continue to carefully coordinate fiscal and monetary policy measures to mitigate the potential for further inflationary pressures.

We remain optimistic based on this trend and believe the next announcements will not be higher but will possibly be the same or less.

The Bank’s next scheduled date for announcing the overnight rate target is Wednesday, March 8, 2023.

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