Bank of Canada raises its policy rate by 25 basis points to 2.5% — its first increase since 2023
The Bank of Canada said on Wednesday 28 October 2026 that it has increased its target for the overnight rate by 25 basis points to 2.5%, with the Bank Rate at 2.75% and the deposit rate at 2.45%. The Bank said inflation has been around 3% since April and is expected to rise to about 3.5% by the end of the year, and that Governing Council decided to raise the rate to reduce the risk that high energy prices spread broadly to other prices — while saying a further increase could be needed, but that it would proceed carefully.
Key points
- The Bank of Canada raised its overnight-rate target by 25 basis points to 2.5% on Wednesday 28 October 2026 (Bank Rate 2.75%, deposit rate 2.45%), per the Bank's own press release.
- The Bank says inflation has been around 3% since April, is expected to reach about 3.5% by year-end and to average 3% in 2027, before returning to 2% in mid-2028.
- Governing Council says a further increase could be needed, but it will proceed carefully; Reuters reports this is the first increase since July 2023.
- The Bank now expects Canadian growth of 1% in 2026 and 2% in 2027 and 2028. The next rate announcement is scheduled for 9 December 2026.
What happened
The decision was announced at 09:45 Eastern Time alongside the Bank's October Monetary Policy Report. Earlier Vozia scans on 28 October had the decision listed as still ahead; this brief is published now that the Bank's own release has been read directly in full.
In its release the Bank ties the higher, more persistent inflation mainly to persistently high oil prices in the eighth month of the Middle East conflict, with cost pressures building through production and transport, while noting core inflation measures remain close to 2% and longer-term inflation expectations remain well anchored.
Claim by claim
Why this label: From the Bank of Canada's own press release of 28 October 2026, read in full for this brief — the central bank's account of its own decision. Reuters reports the same decision: a 25-basis-point lift to 2.5%.
On the ladder: a claim earns Verified from primary evidence, or from two independent sources that do not copy each other.
Why this label: The inflation path and Governing Council's reasoning are the Bank's own, from its release read in full. These are the Bank's projections, reported here as its projections, not as outcomes. Governor Tiff Macklem's press-conference opening statement, carried in full by Reuters, gives the same reasoning in his own words.
On the ladder: a claim earns Verified from primary evidence, or from two independent sources that do not copy each other.
Why this label: Growth figures and forecasts are from the Bank of Canada's own release, read in full for this brief. The third-quarter figure is the Bank's reading of recent indicators, and the 2026–2028 figures are its projections.
On the ladder: a claim earns Verified from primary evidence, or from two independent sources that do not copy each other.
Show all claims (1 more)
Why this label: The 'first increase since July 2023' point and the quoted Macklem wording are from Reuters' report and its full-text carry of the Governor's opening statement, both read for this brief. The decision itself, above, rests on the Bank's own release.
On the ladder: a claim earns Verified from primary evidence, or from two independent sources that do not copy each other.
What we know / what we don't know yet
What we know
- The decision itself, the new rate levels, the Bank's inflation and growth projections and Governing Council's stated reasoning — all from the Bank of Canada's own release, cross-checked against Reuters.
What we don't know yet
- Whether the Bank will raise the rate again on 9 December 2026 — the Bank says a further increase could be needed but that it will proceed carefully.
- How markets and Canadian mortgage and lending rates move in response — not stated in the sources read for this brief.
Why it matters
A central bank raising rates for the first time in more than three years, because energy-driven inflation is proving persistent, is the kind of decision that feeds straight into borrowing costs — and the Bank of Canada is moving while the US Federal Reserve's own decision, due later on Wednesday, is still awaited.
Update history
No silent edits. Every change is written here, with its time.
- Latest
Story published as a confirmed brief, based on the Bank of Canada's own press release of 28 October 2026, read in full, cross-checked against Reuters. The decision had been flagged as FAST-lane in earlier scans on 28 October while it was still listed as ahead.