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Bank of Canada’s Shock 100-Basis-Point Hike Is Most Since 1998

  • Macklem cites worries about price gains becoming entrenched
  • Inflation now forecast to linger near 8% in coming months
Tiff Macklem.
Tiff Macklem.Photographer: David Kawai/Bloomberg
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The Bank of Canada hiked interest rates by a full percentage point, a surprise move that supercharges efforts to withdraw stimulus amid fears four-decade-high inflation is becoming entrenched.

Governor Tiff Macklem raised the central bank’s policy rate to 2.5% in a decision announced Wednesday in Ottawa that warned of more hikes to come. The 100-basis-point move is the largest increase since 1998. Markets and economists were anticipating 75 basis points.