October 29, 2026
1. Bank of Canada Rate Hike Since July 2023
The Bank of Canada rate hike on October 28, 2026, raised the overnight policy rate by 0.25 percentage points to 2.50%, the first increase since July 2023. Governor Tiff Macklem cited persistent inflation and stronger-than-expected economic activity.
2. Inflation Forecast Raised to 3.1% for 2027
High energy and import costs are expected to keep inflation elevated. The Bank now forecasts 2027 average inflation at 3.1%, up from 2.0% in July, with a return toward its 2% target by mid-2028.
3. Canada’s 2027 Growth Forecast Upgraded from 1.8% to 2.0%
Rather than lowering its forecast, the Bank raised its estimate for 2027 GDP growth to 2.0% from 1.8%. Business investment and government spending are expected to support the recovery, despite ongoing U.S. trade tensions.
4. Variable-Rate Mortgage Borrowers May Face Higher Costs
Adjustable-rate mortgage and HELOC payments may rise as lenders adjust prime rates. For fixed-payment variable mortgages, more of each payment may go toward interest. Fixed mortgage rates depend primarily on bond yields, not the policy rate alone. Macklem said further hikes remain possible; the next rate announcement is December 9.
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Maurice Kwok ・ 郭澤文
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