The Bank of Canada raised its benchmark interest rate by 50 basis points, to 4.25 per cent.
The move was widely expected by economists, who were anticipating a rate hike of either 25 or 50 points.
Canada’s central bank has raised its rate seven times this year in its fight to wrestle inflation into submission. In the process, the bank has taken its rate from 0.25 per cent to 4.25 per cent.
That’s had a huge impact on the rates that Canadian consumers and businesses get from their banks on things like savings accounts and mortgages.
In previous rate hikes, the bank made it clear that it would continue to raise its trend-setting rate until inflation came back to within the range of up to three per cent that it targets. As recently as October, the bank said it “expects that the policy interest rate will need to rise further.”
But Wednesday’s statement accompanying the rate decision was a clear departure from that tone, as the language shifted to a more neutral, wait-and-see approach.
“Looking ahead, Governing Council will be considering whether the policy interest rate needs to rise further to bring supply and demand back into balance and return inflation to target,” the bank said.