Economists and bankers predicted that interest rates were going to rise as high of .75% but the Bank of Canada announced that interest rates are to be raised by .50%.

As of right now the overnight interest rate is 3.75% with the bank rate at 4% and the deposit rate is 3.75%.

Inflation around the world is still high, which shows that we are still recovering from the global pandemic. Global supply disruptions and raised product prices, particularly for energy, which has been raised by Russia's attack on Ukraine is also taking an effect on rates.
 

Tighter monetary policies are going to be put in place to try to help with controlling inflation by raising interest rates. As the economies get slower and supply distribution ease, global inflation is expected to come down.

In Canada, the demand for goods and services is still ahead of the economy's ability to supply them, This is causing upward pressure on domestic inflation. Businesses are also reporting shortages in labour and with the strong demand it has led to sharp rise in the price of services.

In the past 3 months inflation has declined from 8.1% to 6.9%. This is primarily due to the drop in the gasoline prices.

The bank is expecting inflation to slowly decline as higher interest rates should help rebalance supply and demand.

The inflation rate is expected to fall down to 3% by the end of 2023 and return to the target of 2%  by the end of 2024.