Markets largely expect the Bank of Canada to lift its policy rate by 25bp to
2.5% on Wednesday. Economists say the move aims to preempt potential spillovers
from rising energy costs, notably gasoline and diesel; if implemented it would
be the BOC's first rate hike since mid‑2023 and its first policy change in about
a year. A 25bp increase would likely push up bank lending and mortgage rates and
weigh on growth. Money markets price roughly a 77% chance of a 25bp hike. The
BOC will announce its decision at 21:45 Beijing time.
