> ## Content Index > Fetch the complete content index at: https://zipzed.ca/llms.txt > Use this file to discover other available public pages before exploring further. # Rates on Hold, Inflation at 3%: What the October 28 Decision Means for Canadian Businesses - URL: https://zipzed.ca/rates-on-hold-inflation-at-3-what-the-october-28-decision-means-for-canadian-businesses/ - Published: 2026-10-16T19:00:00.000Z - Updated: 2026-10-16T19:00:00.000Z - Description: Canada Business Signals — With rates on hold, inflation split between a 3% headline and near-target core measures, and labour and trade risks competing, this issue helps readers interpret October’s decision without treating forecasts as facts. - Author: Marcus Reed - Tags: #eco-b ## 1\. The Rate Picture as of Mid-October 2026 The Bank of Canada held its policy interest rate at 2.25% on September 2, 2026, its seventh consecutive hold since the October 29, 2025 cut. The policy rate is the starting point for many borrowing rates, while the chartered-bank prime rate remained 4.45% after the September decision. The next scheduled announcement is Wednesday, October 28, 2026, at 9:45 a.m. ET. It will include the quarterly Monetary Policy Report, which provides the Bank’s base-case projection for inflation and growth and its assessment of risks. The final scheduled decision of 2026 is December 9. In its September release, the Bank said economic activity and inflation were evolving broadly as expected in the July Monetary Policy Report. It also said upside risks to inflation had increased and new tariffs had made growth prospects more uncertain. The Governing Council said it was prepared to adjust monetary policy as needed. For Canadian businesses, the immediate operating environment is therefore one of rate stability combined with uncertainty about costs, trade conditions, and demand. ## 2\. Inflation: Headline Above Target, Core Near It The August 2026 Consumer Price Index reading, released September 14, showed headline inflation at 3.0% year over year, unchanged from July. Prices fell 0.1% month over month in August. Gasoline was identified as an important factor keeping headline inflation elevated. The Bank of Canada’s preferred core measures were closer to its 2% inflation target. August CPI-trim was 1.9%, and CPI-median was 2.0%. CPI excluding food and energy was 2.1%. This difference matters when interpreting the environment. Headline inflation captures the overall consumer basket and can be affected by volatile components. Core measures are intended to help assess underlying price pressures. Neither measure, by itself, determines the next rate decision. The next CPI release, covering September 2026, is scheduled for October 19, nine days before the October 28 announcement. ## 3\. Growth and Labour Market Signals The evidence available before the October decision is mixed. Reporting around the September decision described second-quarter growth at an annualized 3.3%, above the Bank’s 2.5% projection, with the recovery broadening after the spring. At the same time, labour-market conditions weakened. Employment reportedly fell by 68,000 in September, while the unemployment rate rose to 6.5%. These figures point to a more uneven operating environment: aggregate growth can improve while hiring conditions and household demand remain under pressure. The Bank has described two risks pulling in opposite directions. Persistently high oil prices could spill into other prices, while new United States tariffs could make growth less certain. Governor Tiff Macklem said monetary policy cannot offset tariffs or influence global energy prices. The Bank’s role is to keep global developments from jeopardizing price stability in Canada. That distinction is useful for business readers: a rate decision may affect financing conditions, but it cannot directly resolve trade barriers, energy-price volatility, or sector-specific demand changes. ## 4\. Expectations Are Not Outcomes Market pricing and economist views are indicators of expectations, not facts about what the Bank will do. Around the September decision, bond markets put the probability of a 25-basis-point increase on October 28 at about 28%, versus 72% for a hold. Pricing implied approximately 90% odds of an increase by December 9\. Most bank economists did not expect a December increase, although money markets were pricing a partial increase. These estimates can change quickly when new inflation, employment, trade, or energy data arrive. The October 19 CPI release and the September employment data released October 9 were identified as important information before the October decision. The safe interpretation is not that a hike or hold is guaranteed. It is that markets were assigning more weight to competing risks than to a settled policy path. ## 5\. Practical Context Checklist for the October 28 Announcement For businesses tracking the operating environment, use the announcement as a structured reading exercise rather than as a signal to make an individualized financial or operational decision: - Record whether the policy rate changes and whether the Bank’s language on inflation risks changes. - Compare the October Monetary Policy Report’s growth and inflation projections with the July baseline. - Check whether headline CPI moved from 3.0% and whether CPI-trim and CPI-median remained near 2%. - Note how the Bank describes tariffs, energy prices, exports, imports, and domestic demand. - Separate conditions that monetary policy can influence, such as broad financing conditions, from conditions it cannot directly control, such as tariffs and global energy prices. - Treat market-implied probabilities and economist forecasts as dated expectations that may be revised. - Mark December 9 as the final scheduled 2026 decision and verify future dates against the Bank’s own calendar when planning monitoring cycles. ## 6\. Uncertainty Note This issue describes conditions as of mid-October 2026\. The October 28 decision had not occurred when this issue was prepared, and no outcome is guaranteed or presented as a prediction. Inflation figures cited here refer to August 2026 and were released September 14\. Employment figures cited refer to September 2026\. Headline CPI and core measures capture different aspects of price pressure and can point in different directions. Market pricing, economic forecasts, and official projections can change as new data arrive. This publication explains Canada’s operating environment. It does not provide individualized financial, investment, legal, tax, accounting, employment, or business advice. ## Sources - Bank of Canada, Interest Rate Announcement and Monetary Policy Report, October 28, 2026: https://www.bankofcanada.ca/2026/10/interest-rate-announcement-and-monetary-policy-report-october-28-2026/ - Bank of Canada, policy rate announcement, September 2, 2026: https://www.bankofcanada.ca/2026/09/fad-press-release-2026-09-02/ - Bank of Canada, Consumer Price Index data through August 2026: https://www.bankofcanada.ca/rates/price-indexes/cpi/ - Statistics Canada, Consumer Price Index portal: https://www.statcan.gc.ca/en/subjects-start/prices\_and\_price\_indexes/consumer\_price\_indexes - nesto.ca, Bank of Canada Policy Interest Rate Schedule 2026, updated October 15, 2026: https://www.nesto.ca/mortgage-basics/bank-of-canada-interest-rate-schedule/ - RBC My Money Matters, Bank of Canada interest rate update, September 2, 2026: https://www.rbcroyalbank.com/en-ca/my-money-matters/money-academy/economics-101/understanding-interest-rates/bank-of-canada-interest-rate-announcement/ - FXMacroData, Canada CPI inflation release, September 14, 2026: https://fxmacrodata.com/canada/inflation/announcements/cad\_inflation\_2026-09-14 - OpenDataCanada, Canada Inflation Rate tracker: https://opendatacanada.ca/trackers/inflation