Canada raises benchmark interest rate to 2.5%... also considering holding at 2.25%

The Bank of Canada raised its policy rate by 25 basis points to 2.5%, though it also weighed holding at 2.25%, according to minutes of the October 20 meeting released November 11 that preceded the October 28 decision. Officials cited the risk that elevated energy costs would spill over into broader goods and services prices and broaden inflation pressures. Policymakers noted global growth running stronger than July projections despite high oil prices, supported by AI-related investment in the U.S. and Asia, while costly energy weighed on oil-importing economies such as the euro area. Canada's domestic economy also proved more resilient than expected. Investors will watch whether energy-driven price pressures persist and whether the bank retains scope to pause at 2.25% at its next meeting.