Bank of Canada expected to hike key interest rate Wednesday as inflation rages

The Bank of Canada is widely expected to announce another massive hike in its key interest rate on Wednesday morning as inflation continues to rise in Canada and beyond.

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The overnight rate was close to zero in early 2022, but the bank increased the rate in March and again in April to contain inflation in housing and other sectors.

After a quarter percentage point increase in March, a half percentage-point increase in April signaled the urgency faced by the central bank. Wednesday’s increase is expected to be another half percentage point.


Inflation reached 6.8 per cent in April, the highest since January 1991. Gas prices were up more than 36 percent, while groceries were up nearly 10 percent.

The war in Ukraine has driven up wheat prices because a large part of the world’s wheat is grown in that region.

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Conflict is also a major driver of gas prices, which in turn affects many other products due to the cost of transportation.