Bank of Canada Interest Rate Hike Likely First of Many, Say Analysts

Central bank raises benchmark interest rate to 0.5 percent from 0.25 percent

Bank of Canada Governor Tiff Macklem speaks at a press conference at the central bank in Ottawa on Dec. 15, 2021. The BoC raised its overnight rate target by half a percent on June 1, 2022. The Canadian Press/Justin Tang

The Bank of Canada’s modest rate increase on March 2 will do little to stem inflation, say analysts, who expect more rate hikes later this year.

The BoC’s increase of 0.25 percentage points to arrest increasing inflation brought the rate to 0.5 percent. The hike was widely expected by analysts, even though it’s earlier than the mid-2022 date the bank touted throughout 2021.