A majority of economists expect the Bank of Canada to raise interest rates another 25-basis points in July, according to a poll by the Reuters News Agency.
Economists who were polled said they expect Canada’s central bank to lift its trendsetting overnight interest rate to 5.00% from 4.75% at its next policy meeting on July 12.
The Bank of Canada surprised economists and stock markets by lifting its key interest rate by 25-basis points on June 7 of this year, citing growing concerns about inflation remaining high.
At 4.75%, the Bank of Canada’s overnight interest rate is currently at its highest level in 22 years. The central bank reiterated its commitment to lower inflation back down to its 2% target.
Twenty out of 25 economists polled by Reuters said they expect the Bank of Canada to again hike its overnight rate by 25-basis points in July.
Also, 22 of the 25 economists who were surveyed said they expect the overnight interest rate to peak at 5.00%. Only one of the 25 polled economists expects an interest rate cut this year.
Canada’s economy grew at a faster-than-expected annualized rate of 3.1% in this year’s first quarter. The inflation rate in Canada is currently at an annualized 4.4%.
Reuters snap survey of economists was conducted between June 8 and 13.
