Bank of Canada Rate Decision October 2026: Rise to 2.5% and What Next

The Bank of Canada raised its policy rate by 25 basis points to 2.5% on Wednesday 28 October 2026, announcing the move at 09:45 Eastern Time, which was 13:45 UK time (GMT). On versus, What will the Bank of Canada decide in October? has shown as settled since 13:55 UK time that day, and at 06:57 UK time on 29 October 2026 the separate prediction Will Canada's central bank raise rates by 31 Dec? was still open, with its page showing 99.9p for Yes, the market's estimate of a 99.9% chance.

This guide is for readers in Great Britain, with facts checked at the official sources on 29 October 2026; it is not advice. UK times are GMT since the clocks went back on 25 October (GOV.UK); Ottawa is four hours behind the UK until its own clocks go back on 1 November, then five.

The first rise since July 2023

The Bank's release of 28 October puts its target for the overnight rate at 2.5%, with the Bank Rate at 2.75% and the deposit rate at 2.45%. The target is the rate the Bank wants financial institutions to charge each other on one-day loans and the starting point for many interest rates in Canada; the other two are what the Bank charges and pays those institutions overnight (explainer). A change takes effect the day after its announcement, so 2.5% applies from Thursday 29 October.

It is the Bank's first increase since 12 July 2023, when it took the rate to 5%. It then cut in steps to 2.25%, the last cut coming on 29 October 2025, and held there at seven decisions in a row, as its policy rate page shows.

Why the Bank raised

The release puts the case on inflation. With oil prices persistently high, consumer price inflation has been around 3% since April, and the Bank expects about 3½% by the end of 2026. Statistics Canada's release of 19 October 2026 put it at 3.1% in the year to September, with gasoline 27.8% dearer than a year earlier; excluding gasoline, prices rose 2.2%, and the three core measures the Bank tracks ranged from 1.8% to 2.4% (core inflation table). The Bank's target is 2% (monetary policy framework).

The Bank's concern is what comes next. Its release says cost pressures are building: dear fuel is raising production and transport costs, imported industrial and electronics inputs cost more, and Bank surveys suggest firms will pass more of those costs on over the next year. Near-term inflation expectations have risen, while longer-term ones remain well anchored. Governing Council raised the rate to reduce the risk that high energy costs feed through into prices more widely.

Growth, the other half of the backdrop the release describes, also picked up: GDP grew 3.3% in the second quarter and recent indicators point to about 2% in the third, both stronger than the Bank expected in July, though unemployment has been around 6½% for several months and some spare capacity remains. It said the rate might need to rise further, but that Governing Council “agreed to proceed carefully” given the uncertainties.

What the Bank now forecasts

The full projection is in the October Monetary Policy Report, published with the decision. The release sums it up:

• Inflation: about 3½% by the end of 2026, an average of 3% in 2027 (a percentage point above the July projection), then 2% in the middle of 2028.
• Canadian growth: 1% in 2026 and 2% in both 2027 and 2028, somewhat stronger overall than in July, with new US tariffs expected to slow the last quarter of 2026.
• Main uncertainties: for inflation, developments in the Middle East and how businesses respond to cost pressures; for growth, Canada-US trade relations.

What the versus pages show

What will the Bank of Canada decide in October? asked how far the 28 October announcement would move the overnight rate target, going by the Bank's own release, with five answers from a cut of 50 bps or more to a rise of 50 bps or more (a basis point is a hundredth of a percentage point). Its end date was 00:00 UK time on 28 October, and the versus API has listed it as settled since 13:55 UK time that day. The Bank's release records a rise of 25 basis points: compare that with the answers on the page (what market resolution means).

Will Canada's central bank raise rates by 31 Dec? asks whether the Bank lifts the target at any time between the prediction's creation and 05:59 Central European Time on 1 January 2027 (04:59 UK time, GMT), going by the Bank's policy rate page with credible news reports as a back-up; No cannot be settled before that deadline. The page was created on 5 August 2026, so the Bank's increase of 28 October came inside that window; compare it with the two answers. At 06:57 UK time on 29 October 2026 its page showed 99.9p for Yes and 2.9p for No; separate answers need not add up to exactly 100p (how to read market probabilities).

A third prediction, What will New Zealand's central bank do with rates on 28 Oct?, covers the decision that New Zealand's central bank had scheduled for the same day; it has shown as settled since 03:06 UK time on 28 October.

Dates to watch before 9 December

• Tuesday 10 November, 18:30 UK time: the Summary of Deliberations for this decision, at 13:30 in Ottawa (Bank events), showing what Governing Council weighed, including any talk of further rises.
• Monday 16 November, 13:30 UK time: October consumer prices from Statistics Canada (release calendar). A figure heading towards 3½% fits the Bank's forecast; one well above it would strengthen the case for another increase, and a fall would weaken it.
• Monday 30 November, 13:30 UK time: third-quarter GDP; the Bank's indicators point to about 2% growth, so a clearly different figure would shift the starting point of its forecast.
• Wednesday 9 December, 14:45 UK time: the last rate announcement of 2026 (09:45 in Ottawa), without a new Monetary Policy Report; the next report is due on 27 January 2027.

Hold, rise or cut on 9 December, in plain words

A hold would keep the target at 2.5%. Another quarter-point rise would take it to 2.75% from 10 December, and a quarter-point cut would bring it back to 2.25%. In the Bank's explainer, a higher rate means people and businesses pay more interest on loans and mortgages, which holds back borrowing and spending and slows inflation; a lower rate makes borrowing cheaper and pays less interest on savings.

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Frequently asked questions

Did the Bank of Canada raise interest rates in October 2026?

Yes. At 13:45 UK time (GMT) on 28 October 2026 it raised its target for the overnight rate by 25 basis points to 2.5%, its first increase since July 2023.

What is the Bank of Canada interest rate now?

2.5% from 29 October 2026, with the Bank Rate at 2.75% and the deposit rate at 2.45%.

When is the next Bank of Canada rate decision?

Wednesday 9 December 2026 at 09:45 in Ottawa, which is 14:45 UK time (GMT). The next Monetary Policy Report is due on 27 January 2027.

Will the Bank of Canada raise rates again?

The Bank said a further rise might be needed, gave no date and said it would move carefully. October's inflation figures, due on 16 November, arrive before the 9 December decision.

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