Bank of Canada decides Oct 28: a hike to 2.50% is back on the table

The Bank of Canada announces its next interest rate decision on Wednesday, October 28, with the policy rate sitting at 2.25% – where it has been since October 29, 2025. This time, the big banks’ economists are lined up behind a 0.25-point hike to 2.50% – but with unusually low conviction, and a hold is still very much in play.

Why a hike is back on the table

Expectations flipped after two things: inflation and energy prices. Statistics Canada’s September CPI came in at 3.1% – the third straight month at or above 3%, driven mainly by gasoline. Crude oil has averaged about $95 a barrel since the last decision on September 2, roughly 54% higher than a year earlier, according to RBC Economics. Governor Tiff Macklem then put it in plain terms over the weekend: “The question we’re going to be asking ourselves is, is inflation likely to come back down towards our target on its own, or are we going to have to raise interest rates to influence the path?”

Who expects what

Derek Holt of Scotiabank says the Bank “needs to get on with tightening” and forecasts a 25-basis-point hike on decision day. Desjardins’ Randall Bartlett says Macklem’s comments “flipped the script,” putting Desjardins in the October camp – with a further quarter-point hike forecast for January. BMO’s Robert Kavcic expects “a very cautious set of rate hikes.” RBC Economics is also pencilling in a Wednesday hike, but flags “very low conviction”: it says a hold that tees up a December or January move is “almost equally probable.” The split itself tells you how close this call is.

What it means for your money

A hike would raise borrowing costs on variable-rate mortgages and lines of credit, and would land on a housing market already absorbing higher fixed rates: five-year Government of Canada bond yields, which fixed mortgages are priced off, have climbed more than 40 basis points in three months, according to RBC. We looked at the mortgage picture earlier this month: Bank of Canada set to hold October 28 – but fixed mortgage rates are rising.

Wednesday is also payment day for CPP and OAS – the payment schedule is here – so it’s a double-header for household finances.

What happens Wednesday

The rate announcement comes with the Bank’s full Monetary Policy Report, and Governor Macklem and Senior Deputy Governor Carolyn Rogers hold a press conference at about 10:30 a.m. ET. After Wednesday, the Bank has one more 2026 announcement date: December 9. Forecasts are just that – we’ll have the decision and the market reaction as it lands.

Sources: Bank of Canada policy interest rate, Global News, RBC Economics.

Update – October 28, 2026: The Bank of Canada did hike, raising the policy rate 25 basis points to 2.50 per cent – the first increase in more than three years. Full details: Bank of Canada hikes to 2.50%.