Economy· August 17, 2026 at 01:50 p.m.
Bank of Canada Ponders Rate Hike Amid July Inflation Spike
Key takeaways
- Canada's annual inflation rate reached 3% in July
- This is the highest inflation rate since October 2018
- Inflation surpasses Bank of Canada's target of 2%
Canada's annual inflation rate reached 3% in July, prompting speculation about a potential interest rate hike by the Bank of Canada. This is the highest inflation rate since October 2018 and surpasses the central bank's target of 2%.
The increase was primarily driven by higher prices for gasoline, shelter, and food.
Bank of Canada Governor Tiff Macklem stated that the central bank will be closely monitoring the situation. He emphasized that any decision regarding interest rates would depend on the evolution of the economy and inflation.
In June, the Bank of Canada kept its key interest rate at 0.25%, where it has remained since March 2020.
If a rate hike occurs, it would mark the first increase in over seven years.