{"id":1362,"date":"2026-09-18T21:00:35","date_gmt":"2026-09-18T13:00:35","guid":{"rendered":"https:\/\/btbitcoin.net\/index.php\/2026\/09\/18\/posthaste-pressure-ramps-up-on-bank-of-canada-to-start-insurance-hikes-in-october-economist-says\/"},"modified":"2026-09-18T21:00:35","modified_gmt":"2026-09-18T13:00:35","slug":"posthaste-pressure-ramps-up-on-bank-of-canada-to-start-insurance-hikes-in-october-economist-says","status":"publish","type":"post","link":"https:\/\/btbitcoin.net\/index.php\/2026\/09\/18\/posthaste-pressure-ramps-up-on-bank-of-canada-to-start-insurance-hikes-in-october-economist-says\/","title":{"rendered":"Posthaste: Pressure ramps up on Bank of Canada to start ‘insurance hikes’ in October, economist says"},"content":{"rendered":"
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Bank of Canada governor Tiff Macklem could be forced to hike interest rates sooner than later, one economist says. (Credit: Blair Gable) <\/figcaption><\/figure>\n
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The Bank of Canada could be forced to play catch-up after the United States Federal Reserve hiked interest rates on Wednesday for the first time in three years, one economist says, while others think policymakers still have some room to manoeuvre, though the window to stand pat is closing. <\/p>\n

“We’ve actually pulled forward our Bank of Canada call,” Michael Davenport, a\u00a0senior economist at Oxford Economics Ltd., said. <\/p>\n

Oxford now expects the Bank of Canada to hike rates starting in October, with another one following in December. Previously, Oxford called for rates to stay on hold until the fall of 2027. <\/p>\n

“We don’t think that they are going to raise rates further than that,” Davenport said. “Our baseline call is that they’ll basically adjust the policy rate back up to a neutral setting.” <\/p>\n

Two 25-basis-point hikes would put rates at 2.75 per cent, right in the middle of the Bank of Canada’s target neutral range of 2.25 per cent to 3.25 per cent. <\/p>\n

Oxford’s previous call has gone out the window for a few reasons. <\/p>\n

It expects oil prices to remain high \u2014 they currently sit above US$100 a barrel \u2014 for the next six months or so due to the ongoing conflict in the Middle East. It also predicts Canada’s overall inflation rate could rise to 3.5 per cent or even higher this year, though it doesn’t expect inflation to spread to the wider economy. <\/p>\n

Inflation for August, the most recent data available, held at three per cent year over year, Statistics Canada said, due mostly to lower gas-pump prices as the global price of oil fell into the range of US$80 to US$85 last month. <\/p>\n

“Given that, and the fact that other global central banks are now starting to tighten policy \u2026 we think that’s going to sort of tip the balance of risks enough for the Bank of Canada to think, ‘OK, we need to deliver a couple of insurance hikes to get rates back into a more neutral stance in case oil prices do remain elevated,’ and they do start to see that kind of more sustained pass through to other parts of the consumer basket,” Davenport said. <\/p>\n

Another reason for a hike is that higher U.S. interest rates and those of other countries will hurt the value of the Canadian dollar, making imports more expensive. <\/p>\n

Oxford isn’t alone in thinking a hike is coming at the Oct. 28 Bank of Canada meeting. Bank of Nova Scotia Economics is also calling for a hike next month. <\/p>\n

But others say there’s still time to wait. <\/p>\n

“Yesterday’s Fed hike is reflective of a global phenomenon where central banks look through the immediate impacts of higher oil prices, but their patience is clearly wearing thin,” Royce Mendes, managing director and head of macro strategy at Desjardins Group, said. <\/p>\n<\/p><\/div>\n