Bank of Canada Raises Rates Again and Vows to Be Forceful on Inflation
OTTAWA—The Bank of Canada on Wednesday increased its policy interest rate by a half-percentage point, its second consecutive jumbo-sized move, and said that, if necessary, it is willing to act more forcefully to drive inflation down from near 7% to its 2% target.
The Bank of Canada lifted its target for the overnight rate by half a percentage point from 1.0% to 1.5%, which marked the first time since the central bank adopted fixed-announcement dates in late 2000 that it delivered consecutive half-point rate rises. All 12 economists surveyed by The Wall Street Journal before Wednesday’s decision predicted a second straight half-point increase. The economists surveyed, citing annual inflation at 6.8% or a 31-year high and strong domestic demand, also predicted another half-point rate rise at the central bank’s next scheduled policy decision in July.
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