Bank of Canada: the 2.5% rate may have to rise again

What happened. Two weeks after each decision the Bank of Canada publishes a summary of how its Governing Council debated the rate. The November 10 summary covers the October 28 decision. The council weighed two options: hold at 2.25% or raise to 2.5%. It raised.

The case for holding. Price gains were still mostly in energy and energy-heavy services such as airfares. CPI excluding gasoline was 2.2% and core measures were near 2%. Some slack remained, and new US tariffs weigh on growth.

The case for hiking. Gasoline, diesel and heating oil cost far more than in July, and the bank expects them to stay high for longer. Oil is about $35 a barrel above the July assumption. Businesses have mostly absorbed higher costs so far, but the bank's surveys show they plan to pass more of them on over the next year.

The key line. Uncertainty did not mean inaction, but the council agreed to proceed carefully. Members agreed there could be a need to raise the rate further and will take decisions one meeting at a time.

The forecast. CPI inflation at 3.5% at the end of 2026, above 3% for much of 2027, back to the 2% target by mid-2028. Even without pass-through, the energy shock alone would keep inflation near 3% for more than a year. Growth of 1% in 2026 and 2% in 2027 and 2028. Unemployment around 6.5%.

Split views. Members disagreed on how fast and how fully costs will reach consumer prices. Some felt the labour market is stronger than the headline numbers suggest.

Confirmed facts

• The Bank of Canada published the summary of deliberations for its October 28 decision on November 10, 2026 at 13:30 ET.^[1][2]
• The council weighed holding at 2.25% or raising to 2.5% and raised to 2.5%.^[1][3]
• Members agreed there could be a need to raise the rate further and will decide one meeting at a time.^[1][3][4]
• CPI inflation is seen at 3.5% at the end of 2026, above 3% for much of 2027 and back at 2% by mid-2028.^[1][3]
• CPI excluding gasoline was 2.2%, and core measures were near 2%.^[1]
• Oil was about $35 a barrel above the July Report assumption.^[1]
• Growth forecast: 1% in 2026, 2% in 2027 and 2028.^[1]
• The next decision is on December 9, with swaps pricing about a 50% chance of a hike.^[4]

Implications

• ConfirmedThe Bank of Canada left the door open to another rate hike.
• Our readingIf oil stays expensive, the odds of a December hike rise. This is our reading.
• Our readingVariable-rate mortgages in Canada could get more expensive. This is our reading.

Still unknown

• Whether the bank hikes on December 9
• How long oil stays expensive
• How fast businesses pass costs on to prices

Who it affects

Canada, North America. People with a mortgage or loan in Canada, or holding Canadian dollars or bonds

Sources

1. Bank of Canada: Summary of Governing Council deliberations: Fixed announcement date of October 28, 2026 November 10, 2026 · official
2. Bank of Canada: Release of the Bank of Canada's summary of deliberations November 10, 2026 · official
3. The Canadian Press (CP24): Bank of Canada moving carefully, but further hikes might be needed: meeting summary November 10, 2026 · media
4. Investing.com: Bank of Canada signals more rate hikes may come despite uncertainty November 10, 2026 · media