A new poll by the Reuters News Agency has found that a majority of economists expect the Bank of Canada to raise interest rates by 50 basis points to 4.25% at its next policy meeting on December 7.
The poll also found that economists expect Canada’s central bank to stop raising interest rates, at least temporarily, following the December meeting while it assesses the state of the economy.
Canada’s economy expanded at an annualized rate of 2.9% in the third quarter of this year but is dealing with a rapidly cooling housing market and one of the highest household debt-to-income ratios in the world.
Inflation in Canada is currently at 6.9%, more than three times the Bank of Canada’s 2% target.
The central bank has already raised interest rates by 350 basis points since March of this year to bring down elevated consumer prices.
Now, economists anticipate that the Bank of Canada will hike rates another half percentage point before taking a pause.
Just over half, 16 of 30, of the economists polled by Reuters said they expect a half-point rate hike on December 7, which would take the trendsetting overnight interest rate to 4.25%.
Nearly 90% of poll respondents said they expect the Bank of Canada to halt interest rate hikes after the December meeting.
