The Bank of Canada decides tomorrow — and for the first time in a year, a hike is the call to beat
News · The Canadian Chronicle
Published Tuesday, October 27, 2026 · Last updated Tuesday, October 27, 2026
The Bank of Canada announces its next interest-rate decision today, Wednesday, October 28, at 9:45 a.m. ET, together with its quarterly Monetary Policy Report. Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers hold a press conference at 10:30 a.m. The target for the overnight rate has sat at 2.25 per cent since October 2025 — seven straight holds, most recently on September 2 — and tomorrow is the first decision in a year where a move upward is the expectation to beat. Nothing in this story is a decision: the bank has not announced anything yet, and this page will be updated with the actual decision after 9:45 a.m.
A Reuters poll of 34 economists, taken October 21–23, found 19 — 56 per cent — expecting the bank to raise the rate by a quarter point to 2.50 per cent, its first increase in a year, and to follow with one more hike by the end of March. Interest-rate futures have moved the same way, from pricing roughly a 30 per cent chance of an October hike to around a three-in-four likelihood. The other 15 economists in the poll did not call a hike — a hold at 2.25 per cent remains a live outcome, not a formality.
The case for a hike starts with inflation. Statistics Canada put September inflation at 3.1 per cent, just above the bank's 1-to-3 per cent target range. The bank's latest business outlook survey showed inflation expectations rising sharply, in the run-up to the recent breakdown in trade talks with the United States, and quarterly inflation forecasts in today's Monetary Policy Report are expected to be revised higher. Remarks by Governor Macklem on Saturday were read by markets as a hint that a rise is coming. "What changed the tone in the governor's public comments on the weekend and what changed our view on Monday is the same source, and that is the responses from the BoC's business outlook and consumer surveys," said Royce Mendes, managing director and head of macro strategy at Desjardins, one of the economists who moved from a hold call to a hike call this week.
The case for a hold is on the record too. September's 3.1 per cent was driven mostly by gasoline; excluding gasoline, inflation was 2.2 per cent. CMHC chief economist Mathieu Laberge, speaking at the Mortgage Professionals Canada conference in Calgary on October 19, said he does not see rates going up anytime soon, pointing to a soft job market and to inflation driven largely by global oil prices and supply chains, which interest rates can do little about. The Parliamentary Budget Officer's Economic and Fiscal Outlook, released October 20, takes a slower path still: it cut 2026 growth to 0.9 per cent, warned deficits will run above $63 billion through 2030-31, and built its outlook on rate hikes beginning only in early 2027.
For households, the channel is prime. The chartered-bank prime rate sits at 4.45 per cent, in place since November 5, 2025, and variable-rate mortgages and home-equity lines of credit are priced off prime — the big banks normally move it within a day or two of a Bank of Canada change. A hike tomorrow would raise variable payments; a hold leaves them where they are. Fixed mortgage rates are not set by the overnight rate directly; they follow bond markets, which have already moved on the expectation.
The Chronicle will update this page today after 9:45 a.m. ET with the decision, the bank's revised forecasts from the Monetary Policy Report, and what the governor says at the press conference. (Bank of Canada media advisory, October 2026; Reuters poll, October 23; Statistics Canada; Parliamentary Budget Officer, October 20)