The Bank of Canada increased its target for the overnight rate to 3¾ per cent today (Oct. 26) , with the Bank Rate at 4 per cent and the deposit rate at 3¾ per cent. The Bank is also continuing its policy of quantitative tightening.

Inflation continues to be high throughout the world, which is a reflection of the global recovery from the pandemic, an array of global supply disruptions, and elevated commodity prices, particularly for energy, which rose due to Russia’s attack on Ukraine.

Inflationary pressures in many countries is also being affected by the strength of the U.S. dollar with tighter monetary policies directed at controlling inflation having an impact on economic activity around the world.

The Bank of Canada is forecasting that as the supply disruptions ease and economies slow down, global inflation is expected to decrease.

The Globe & Mail has taken a detailed look at the interest rate increase and the effects it will have on Canada. To read the article, click HERE.