Bank of Canada raises rates by another 75bps

The Bank of Canada (BoC) raised its policy rate by 75bps to 3.25%, in line with market expectations. The new tightening comes after the surprise 100bp hike in July and brings the cumulative policy tightening to 300bp since February.

“The Bank of Canada continues to worry about excess demand and high inflation expectations despite recent weaker inflation and GDP values,” comment analysts at Ing who see further hikes coming, but likely at a slower pace. with the official rate set to reach 4% before the end of the year.