The Bank of Canada has hiked the central bank rate by a half a percentage point which is first time in 20 years a half per cent rate hike has taken place.

The Bank of Canada says the war in Ukraine is disrupting the global recovery from the pandemic and interest rates will likely need to rise further. The next scheduled date for a Bank of Canada rate announcement is June 1, 2022.

The BOC also points to price spikes in oil, natural gas and other commodities adding to inflation as well as supply disruptions from the war in Ukraine which are primary drivers in new economic uncertainty and are behind the decision to increase the Bank of Canada rate to 1 per cent.

Raising the Bank of Canada rate is a tool to combat an increase in inflation.