Bank of Canada will hike its key interest rate by three-quarters of a percentage point on Wednesday as inflation rages on globally.In Canada, inflation hit a 39-year-high of 7.7 per cent in May — well above the two per cent target rate central banks typically aim for.The Bank of Canada raised its key interest rate by half a percentage point on June 1, bringing it to 1.5 per cent.
Since then, it has signalled a willingness to move in a more aggressive direction.“We may need to take more interest rate steps to get inflation back to target.
Or we may need to move more quickly, we may need to take a larger step,” said Governor Tiff Macklem at a news conference on June 9.
Wages in Canada are rising. Will inflation, interest rates follow suit? Most economists are now forecasting a rate hike of three-quarters of a percentage point, following the lead of the U.S.