> ## Content Index
> Fetch the complete content index at: https://www.theglobalbanker.com/llms.txt
> Use this file to discover other available public pages before exploring further.

# Bank of Canada council says rates may need to rise again after October hike to 2.5%
- URL: https://www.theglobalbanker.com/bank-of-canada-council-says-rates-may-need-to-rise-again-after-october-hike-to-2-5/
- Published: 2026-11-10T21:08:57.000Z
- Updated: 2026-11-10T22:12:16.000Z
- Description: The Bank of Canada's Governing Council agreed there could be a need to raise the policy rate beyond 2.5%, according to the summary of its deliberations on the 28 October decision, released on Tuesday.
- Author: TGB Editorial Team
- Tags: Central Banks, Americas, #newsroom

Bank of [Canada](https://www.theglobalbanker.com/market-canada/) policymakers agreed there could be a need to increase the policy rate further, but said they would take decisions one meeting at a time with the best available information, according to the summary of the Governing Council's deliberations released on Tuesday.

The council, led by Governor Tiff Macklem, raised the policy rate to 2.5% last month, the first increase in over three years. The summary says members recognised that uncertainty did not mean inaction, but agreed they would need to proceed carefully.

## OIL PRICES TIP THE BALANCE

The increase decided on 28 October took the target for the overnight rate up 25 basis points to 2.5%, with the Bank Rate at 2.75% and the deposit rate at 2.45%, the bank said at the time. CPI inflation had been around 3% since April, and the bank expected it to climb further by the end of the year.

The conflict in the Middle East was then in its eighth month with no clear path to resolution, and the summary records that the benchmark price of oil was approximately US$35 a barrel higher than assumed in the July Report. The bank projected growth of 1% in 2026 and 2% in 2027 and 2028.

## TWO OPTIONS ON THE TABLE

The council weighed two options: keeping the policy rate at 2.25% or raising it to 2.5%. The main argument for holding was that the rise in inflation had so far been concentrated in energy prices and energy-heavy services such as airfares; CPI inflation excluding gasoline was still 2.2% and measures of core inflation remained close to 2%.

The main argument for the hike was that prices of gasoline, diesel and heating oil were considerably higher than in July and were expected to stay higher for longer. Pass-through of costs to consumer prices had so far been limited, and members shared a diversity of views on its likely speed and extent.

Even without that pass-through, members noted, the energy shock alone would keep CPI inflation at around 3% for more than a year. The council raised its inflation outlook substantially: it expects CPI inflation to rise further by the end of 2026, remain above 3% through much of 2027 and return to the 2% target by the middle of 2028.

Members agreed that the risks had shifted: with a prolonged energy shock and a resilient economy, the risk that high inflation could persist and become broad-based had increased. They said monetary policy cannot lower global energy prices but can stop them from feeding generalised inflation. Some members believed the labour market was stronger than the headline numbers indicated, given strength in private sector job creation.

## THE TGB VIEW

Canada's banking system is dominated by six domestic systemically important banks, which held about 95% of the consolidated assets reported to OSFI by federally regulated banks in July 2026, and those assets totalled C$10.2tn in August 2026\. [Royal Bank of Canada](https://www.theglobalbanker.com/rankings/) and Toronto-Dominion Bank rank 24th and 27th in the TGB Bank Rankings, with assets of US$1,658.6bn and US$1,494.2bn and returns on equity of 14.6% and 16.1% for the year to October 2025\. Consolidated bank assets are around three times GDP, which makes the council's choice to decide one meeting at a time a live issue for the whole system. The next test is the rate announcement scheduled for 9 December.

*Related: [Bank of Canada raises policy rate to 2.5% in first hike since 2023](https://www.theglobalbanker.com/bank-of-canada-raises-policy-rate-to-2-5-in-first-hike-since-2023/)*