BoC raises overnight rate target by 100bps to 2.50% today, even larger than expectation of 75bps. The Bank Rate and deposit rate are now at 2.75% and 2.50% respectively. BoC will also continuing its policy of quantitative tightening.
The central bank also maintains hawkish bias, and said, “the Governing Council continues to judge that interest rates will need to rise further, and the pace of increases will be guided by the Bank’s ongoing assessment of the economy and inflation”
On the economy, BoC estimated that GDP grew by about 4% in Q2, and will slow to about 2% in Q3. The economy is projected to grow by 3.50% in 2022, 1.75% in 2023, and then 2.50% in 2024. Inflation is projected to slow to about 3% by then end of next year, and then returns to 2% target by the end of 2024.
Full statement here.