Bank of Canada raises interest rates for the first time in over three years, with further hikes possible in the future.

BlockBeats news, October 28: The Bank of Canada raised its benchmark interest rate by 25 basis points to 2.50% on Wednesday. The central bank expects inflation to remain significantly above its 2% target until 2028. Bank of Canada Governor Macklem stated that to curb inflation, "further increases in the policy interest rate may be necessary in the future," though central bank officials pledged to proceed cautiously with policy adjustments.

In his remarks, Macklem said: "Raising the policy rate is necessary to reduce the risk that the effects of elevated energy prices spread further and ultimately evolve into broad-based inflation." He also noted that due to the US-Canada trade dispute and Middle East conflict, "uncertainty remains at a high level," and the central bank remains vigilant.

Additionally, the Bank of Canada raised its economic growth forecast, mainly driven by strong consumer spending and export performance, as well as an expected rebound in business investment. As businesses increasingly adopt artificial intelligence and take advantage of the new tax credit policy introduced by Prime Minister Carney, business investment is expected to increase further.