Economists Shift Toward Bank of Canada Rate Hike Ahead of October Decision

By Tahani Elghazaly
Published October 23, 2026

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The outlook for Canadian interest rates has changed markedly ahead of next week's Bank of Canada decision, with a new Reuters poll showing economists increasingly expect a rate increase as inflation pressures build.

The shift is particularly striking compared with the previous survey, in which 80% of respondents predicted that the central bank would keep its benchmark rate at 2.25% through the end of 2026.

In the latest Reuters poll, conducted October 21–23, 19 of 34 economists, or 56%, forecast a quarter-percentage-point increase to 2.50% on October 28.

The reassessment follows fresh evidence of persistent inflation. Statistics Canada reported that consumer prices rose 3.1% year over year in September, accelerating from 3.0% in August and moving slightly above the central bank's 1%–3% target range. Higher energy prices contributed to the increase.

Financial markets have also adjusted their expectations, with interest rate futures indicating roughly a 75% probability of an October increase, according to Reuters.

Beyond next week's meeting, 16 of 29 economists surveyed expect another quarter-point increase by the end of March 2027, potentially bringing the policy rate to 2.75%. Others remain concerned that higher borrowing costs could put additional pressure on Canada's already weak economic growth.

The Bank of Canada will announce its interest rate decision at 9:45 a.m. Eastern Time on Wednesday, October 28, together with updated economic projections in its quarterly Monetary Policy Report