The Bank of Canada has announced a 25 basis point increase in interest rates for a second straight meeting, bringing the overnight lending rate to 5%, its highest level in 22 years.
The decision, widely expected by economists, reflects policymakers' concerns about persistent excess demand and elevated core inflation.
An accompanying monetary policy report reveals a revised forecast that suggests inflation will remain around 3% for the next year before gradually declining to the 2% target by mid-2025, two quarters later than previously projected.
The bank also adjusted growth expectations, with the economy anticipated to average around 1% growth in the second half of 2023 and the first half of 2024.
The Toronto Stock Exchange, Canada’s main index, dipped at the open but was up around 0.6% by mid-morning trading Wednesday.
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