The Bank of Canada (BoC) has raised its benchmark interest rate by 50 basis points, underwhelming a market that was priced for 75 basis points. This follows a 75 basis point (bps) rate hike at the previous meeting in September, and brings the policy rate to 3.75%. The BoC has also notably revised growth forecasts lower, as higher borrowing costs begin to take their toll on the economy. Inflation has also been forecasted to fall below 3% by the end of 2023, which is within the Bank of Canada’s target range.
