What to expect from October's Bank of Canada interest rate update

The Bank of Canada (BoC) will announce its October interest rate update on Wednesday, and Canadians will be watching to see if any changes are on the horizon.

As a refresher, the Bank of Canada held its key interest rate at 2.25 per cent again in September, where it has remained steady over the course of 2026.

The Crown corporation said its decision to hold the rate last month was based on several economic factors, including ongoing conflict in the Middle East as well as the trade war between Canada and the U.S.

In a September news release, the BoC noted that “uncertainty” continued to linger as “new U.S. tariffs and threats of further action pose risks to the sustainability of [Canada’s economic] recovery.”

As we enter the tail end of 2026, will Canadians be in for more of the same when it comes to the overnight rate or is a change on the horizon?

Here’s what one expert predicts ahead of the BoC’s announcement on Oct.28.

Will the Bank of Canada change the interest rate?

JulieK2/Shutterstock

According to Clay Jarvis, mortgage expert at Ratehub.ca, a rate increase is less likely than the BoC holding steady at 2.25 per cent.

“It’s hard to see a clear path to a rate increase at this point,” noted Jarvis. He acknowledged that inflation continues to be a “growing concern” as the Consumer Price Index (CPI) increased from three to 3.1 per cent in September, but that was largely the result of oil prices.

The CPI increase hasn’t reached “the kind of widespread problem that demands the Bank’s attention,” stated Jarvis.

Instead, he highlighted growing concerns around Canada’s rising unemployment, the trade war, and slow economic growth that he thinks will likely result in a rate hold.

Some financial experts think otherwise.

Derek Holt, head of capital markets economics at Scotiabank, noted that it’s likely the BoC will raise its overnight rate by 25bps.

Desjardins also expects a rate hike due to rising inflation and weakened job and housing markets.

The October rate announcement will be the BoC’s second-to-last of the year, with the final rate decision scheduled for Dec.9.

With files from Irish Mae Silvestre