The Bank of Canada has raised interest rates again in an effort to quell inflation. The central bank raised its policy rate by 0.75 percentage points on Sept. 7, bringing its benchmark overnight rate to 3.25 per cent. Economists are expecting the central bank to raise it again before the end of the year.
By now, it’s clear that the Bank of Canada did not anticipate the current rate of inflation. When inflation first started increasing last year, the central bank was slow to start tightening monetary policy. Now that inflation is persistent, the Bank of Canada is making up for lost time by aggressively raising its policy rate to get the inflation rate back on target.
