OTTAWA—The Bank of Canada upped its trendsetting interest rate by 100 basis points—a full percentage point—to 2.5 percent on July 13 in its ongoing battle to lower runaway consumer price inflation. The increase marks the biggest one-time increase in the rate since 1998.
“The Governing Council decided to front-load the path to higher interest rates,” according to the BoC’s press release.
Financial markets were widely expecting an increase of ¾ of a percentage point after the U.S. Federal Reserve raised its fed funds target range by that amount on June 15.
The central bank said that inflation is “higher and more persistent” than it projected in April when it last issued quarterly forecasts and that inflation will “likely remain around 8 percent in the next few months.”…