Bank of Canada expected to raise interest rate thanks to strong economic numbers

OTTAWA – The Bank of Canada is widely expected to raise its trend-setting interest rate today for the first time in six months.

Thanks to stronger economic data, experts are predicting governor Stephen Poloz to hike the rate from its current level of 1.25 per cent.

Poloz has followed a cautious, data-dependent approach in recent months and he hasn’t touched the rate since raising it in January, a move that came after two earlier increases in the second half of 2017.

The central bank’s rate decision arrives as Canada faces significant trade-related uncertainties, including stalled NAFTA talks, U.S. steel and aluminum tariffs and the threat of more duties on the automotive sector.

Poloz recently said the impacts of the U.S.-Canada trade dispute would figure prominently in the bank’s decision-making process for today’s rate announcement.

Many analysts, however, expect Poloz to hike because of healthy numbers of late, including the Bank of Canada’s own survey on business sentiment, tightened job markets and solid wage growth.

The Bank of Canada will also release its updated economic projections today in its latest edition of its quarterly monetary policy report.