The Bank of Canada raised its key interest rate by 100 basis points on Wednesday, making its largest increase since that of August 1998. It is now at 2.50%.
This decision by the central bank signals a more aggressive approach to try to curb inflation, which hit a 39-year high in May at 7.7% on an annual basis.
Most economists expected an increase of three-quarters of a percentage point.
In its most recent monetary policy report, the Bank of Canada noted that inflation was “largely due to international factors”, but that “pressures from domestic demand [s’accentuaient] “.
The central bank thus predicts that inflation will probably remain around 8% over the next few months.
Bank of Canada Governor Tiff Macklem will hold a press conference by videoconference later this morning.
To see in video