KPMG Canada Now Expects Bank of Canada Rate Hike in October, Moves Up Forecast From December

06:50 AM EDT, 10/22/2026 (MT Newswires) -- KPMG Canada said it now expects the Bank of Canada to raise interest rates next week, reversing its earlier forecast of a December 2026 hike following Governor Tiff Macklem's hawkish comments at the IMF meetings in Bangkok over the weekend. Financial markets see an 80% chance of a BoC rate hike at next Wednesday's policy meeting, despite weaker-than-expected inflation data and core inflation holding steady at 2%, wrote KPMG Canada in a Wednesday note. The change reflects the BoC's rising concerns that sustained high energy prices could push inflation higher across the economy and weaken its credibility, said KPMG Canada. Another rate hike in December remains possible if oil prices stay high, KPMG added, but warned that the BoC's more hawkish stance could overlook Canada's fragile recovery, a weakening labor market and ongoing trade uncertainty.