OTTAWA—The Bank of Canada delivered another hefty increase to its main interest rate, taking it above 3% for the first time in over 14 years, and said rates need to go higher to tame inflation.
The Bank of Canada on Wednesday lifted its overnight target rate by 0.75 percentage points to 3.25%, following a surprise full-percentage-point increase in July. Following five increases beginning in March, the central bank’s benchmark interest rate is now 3 percentage points higher than where it started 2022, reflecting the urgency among global central banks to cool inflation triggered by supply-chain disruptions, stronger-than-expected consumer demand and the war in Ukraine.