The Bank of Canada’s policy interest rate, the target for the overnight rate, is 2.5 per cent after the central bank raised it by 0.25 percentage points on Oct. 28, 2026. The next scheduled rate announcement is Dec. 9, 2026.
Last updated Oct. 29, 2026.
Sources: Bank of Canada, Policy interest rate and the Bank’s Oct. 28, 2026, press release.
Current rate and last change
The Bank raised its target for the overnight rate from 2.25 per cent to 2.5 per cent on Oct. 28, 2026, with the Bank Rate at 2.75 per cent and the deposit rate at 2.45 per cent. The Bank’s rate table shows that a change takes effect the day after its announcement. Before that, the rate had been 2.25 per cent since Oct. 29, 2025, when the Bank cut it by 0.25 percentage points.
Why the Bank raised the rate
The Bank said inflation is higher and more persistent than it projected in July. It said consumer price inflation has been around 3 per cent since April and is expected to rise to about 3.5 per cent by the end of the year, with persistently high oil prices and the conflict in the Middle East among the main pressures. Governing Council said it raised the rate to reduce the risk that high energy prices spread to the prices of other goods and services. It added that further increases could be needed but that it would proceed carefully given the uncertainty.
Economic outlook
In its October Monetary Policy Report, the Bank projects the Canadian economy will grow 1 per cent in 2026 and 2 per cent in 2027 and 2028. It expects inflation to average 3 per cent in 2027 and return to about 2 per cent by the middle of 2028. The unemployment rate has been around 6.5 per cent for several months.
Next decision
The Bank’s next interest rate announcement is scheduled for Dec. 9, 2026. Its next Monetary Policy Report is due Jan. 27, 2027.
What it means for borrowers
Our reporting on the decision covers the effect on household budgets and markets. Bank of Canada hikes key rate to 2.5%, first rise since 2023 reports the decision itself. BoC hike adds about $68 a month to $500K variable mortgage works through the cost for variable-rate borrowers. Ontario mortgage brokers concerned by Bank of Canada rate hike carries reaction from the mortgage industry, and TSX closes up 94 points as tech, energy gain after BoC hike covers the market response.
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