Bank of Canada Rate Hike Predictions Grow as Inflation Concerns Mount

Financial market odds have consistently favored rate holds by the Bank of Canada in its recent meetings. However, some economists are now predicting that the central bank may deliver a hike as early as next month to combat inflation. The U.S. Federal Reserve broke its own stance and delivered the United States' first rate hike in more than three years on Wednesday.

The Bank of Canada has maintained its policy rate at 2.25 per cent for nearly a year now, waiting to see how the economy and inflation will adjust to various shocks. Before its September 2 decision to leave the policy rate unchanged, odds of a hold were pegged at 94 per cent, according to LSEG Data & Analytics.

Despite some economists' predictions that the Bank of Canada may raise interest rates soon, others remain unconvinced. The central bank's next meeting is scheduled for early October, and market participants will be closely watching its decision.