BoC Minutes (October 28th meeting): Regarding the path forward, BoC recognised that uncertainty over what to do with rates did not mean inaction

Agreed that monetary policy can prevent energy prices from leading to generalised inflation Acknowledged that inflation expectations may have become more sensitive to recent price changes Noted that rising cost pressures would eventually be reflected in core measures of inflation Agreed it would need to carefully assess how economic developments would affect the outlook Businesses are facing higher costs from non-energy imports, such as semiconductors and computer components Policy decision Governing Council members deliberated two options: maintain the policy rate at 2.25% or raise the policy rate to 2.5%. The main argument for holding the policy rate at 2.25% was that the rise in inflation had so far been concentrated in energy prices and in services that rely heavily on energy inputs, such as airfares. The main argument for increasing the policy interest rate was that prices of gasoline, diesel and heating oil were considerably higher than in July and were expected to remain higher for longer. Governing Council also discussed the path forward for the policy interest rate. Members acknowledged there was considerable uncertainty, both about developments outside Canada and about their impacts in Canada. They recognized that uncertainty did not mean inaction, but they agreed they would need to proceed carefully to assess how economic developments would affect their outlook. Governing Council members agreed there could be a need to increase the policy rate further, but given the uncertainty, they would take monetary policy decisions one meeting at a time with the benefit of the best available information.