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Scotiabank sees eight Bank of Canada interest rate hikes by end of 2023

The Bank of Canada will raise its benchmark interest rate four times in the second half of next year and another four times in 2023, according to a top economist at the Bank of Nova Scotia.

Policymakers led by Governor Tiff Macklem will begin a series of eight 25-basis-point hikes in July of next year, Scotiabank’s Derek Holt said Wednesday on BNN Bloomberg Television. That will be followed by moves in September, October, and December. Holt predicted the the pace of tightening would then slow, with quarterly moves in 2023 bringing the policy rate to 2.25 per cent by the end of that year.

Holt’s aggressive forecast came after Statistics Canada reported that yearly inflation hit 4.4 per cent in September, the highest since February 2003 and the sixth consecutive month of readings beyond the central bank’s control range.

Markets increasingly betting Bank of Canada will hike earlier than forecast — three rate rises seen in 2022

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