Bank of Canada raises key interest rate to 4.75%, the highest level in 22 years. Here’s what’s next

The Bank of Canada has resumed its monetary policy tightening campaign, increasing its benchmark rate by a quarter percentage point on Wednesday.

The decision lifts the policy rate to 4.75 per cent, the highest level since May, 2001, pushing up mortgage rates and squeezing household budgets.

The central bank’s campaign had been on hold since January as it waited to see if borrowing costs were high enough to get inflation under control. However, a run of stronger-than-expected data over the past month called that “conditional pause” into question and brought the bank off the sidelines.

• Deputy governor Paul Beaudry will deliver an economic progress report on Thursday outlining the bank’s rationale for this week’s decision. The speech to the Victoria Chamber of Commerce starts at 3:25 p.m. ET, with a press conference 4:45 p.m. It will be Mr. Beaudry’s last appearance before he retires from the bank in July.
• The Bank of Canada’s next rate decision is on July 12, when it will also publish an updated projection for economic growth and inflation.
• Statistics Canada will release May Labour Force Survey data on Friday. Central bankers will be watching this closely for signs that the labour market is weakening. This could mean an uptick in unemployment or a slowdown in the pace of wage growth. May consumer price index data –which tracks inflation – will be published on June 27.
• The U.S. Federal Reserve’s next rate announcement is on June 14. Chair Jerome Powell suggested last month that the central bank could pause its rate-hike campaign at the next meeting. However, stronger-than-expected economic data has kept open the possibility of a least one more rate increase this summer.