Should the BoC Have Raised Interest Rates?

The Bank of Canada (BOC) may have taken a big gamble on its economy when adopting a new hawkish tone on Wednesday, according to one economic research company.

The central bank raised interest rates to 0.75 percent from 0.50 percent – its first hike in seven years. Investors had prepared for such move but the BOC took a more hawkish tone than expected, mainly when it came to inflation.

Inflation figures have eased over recent months, but the bank said this was a temporary move and it is already registering some pressure from food, electricity and automobiles.

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam