Bank of Canada likely to hike rates next month as inflation pressures build, says Manulife

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomeNewsEconomyBank of Canada likely to hike rates next month as inflation pressures build, says ManulifeChange from Manulife's longstanding view that the central bank would remain on hold through the end of this yearAuthor of the article:Last updated 5 minutes ago Bank of Canada officials make their next interest rate announcement on Oct. 28. Photo by HYUNGCHEOL PARK /PostmediaThe Bank of Canada is likely to raise interest rates at its next two meetings as the Middle East conflict creates the risk of broader price pressures, a senior macro strategist at Manulife Financial said.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountIt’s a change from the firm’s longstanding view that the central bank would remain on hold through the end of this year. Its base case had been for rate hikes to begin in mid-2027, but “inflation dynamics are changing,” strategist Dominique Lapointe wrote in a report to investors.This advertisement has not loaded yet, but your article continues below.Core measures of inflation “have grown close to three per cent month-over-month annualized for two consecutive months,” Lapointe said. “While this momentum cannot be tied to Iran-related supply chains, the prolonged state of the conflict makes it increasingly likely that so-called ‘second-round’ effects will eventually show up in core goods prices.”SUBSCRIBER EXCLUSIVE: FP West: Energy Insider brings you behind the oilpatch’s closed doors with exclusive insights from insiders every Wednesday morning.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of FP West: Energy Insider will soon be in your inbox.We encountered an issue signing you up. Please try againLapointe also pointed to the low likelihood of further escalation by Canada in the trade war with the United States, which he said is “likely to be reassuring” to the central bank.Higher tariffs and trade barriers have created hardship for specific Canadian industries such as steel and autos. But they haven’t resulted in a recession or a broad rise in unemployment, and economic growth bounced back sharply in the second quarter.“Because monetary policy cannot target specific industries (that is the government’s job), the Governing Council is likely to conclude that trade tensions do not offset inflation risks in the near term and that slightly higher rates are required,” Lapointe wrote.The Bank of Canada’s benchmark overnight rate has stood at 2.25 per cent since October 2025.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.