Ahead of Wednesday’s Bank of Canada rate decision, a Reuters poll found 19 of 34 economists expected a quarter-point increase amid higher headline inflation but softer core readings and employment.
A quarter-point move would lift the overnight target from 2.25% to 2.50%. The Bank’s published rate history shows the target was cut by 0.25 percentage points on Oct. 29, 2025, and remained at 2.25% through its Sept. 2 decision.
Statistics Canada reported consumer prices rose 3.1% in September from a year earlier, up from 3.0% in August. Gasoline prices increased 27.8% year over year. Excluding gasoline, the Consumer Price Index rose 2.2%, compared with 2.4% in August. The Bank of Canada’s three core measures, as reported by Statistics Canada, also eased year over year: CPI-common to 2.4% from 2.6%, CPI-median to 1.9% from 2.0%, and CPI-trim to 1.8% from 1.9%.
Statistics Canada recorded 68,300 fewer employed people in September on a seasonally adjusted basis. Employment had also declined in August, by 41,700. The unemployment rate rose to 6.5% from 6.4%.
In his Sept. 2 opening statement, Bank of Canada Governor Tiff Macklem warned that sustained high oil prices and refinery margins could spread into broader inflation. He said the greater risk was that higher energy costs would “spill over and turn into persistent inflation.”
The Bank says its overnight-rate target influences short-term interest rates and usually affects mortgage and consumer-loan rates, so some borrowers may face higher costs if it raises the target.
The Bank scheduled its rate decision and quarterly Monetary Policy Report for 9:45 a.m. ET Wednesday. Macklem and Senior Deputy Governor Carolyn Rogers were due to hold a news conference at about 10:30 a.m. ET. The next scheduled rate decision is Dec. 9.
