The Bank of Canada (BoC) has hiked its key interest rate to 4.75% from 4.5%, with the Bank Rate at 5% and the deposit rate at 4.75%

In an update on Wednesday morning, the BoC said that though consumer price inflation is coming down globally, underlying inflation remains stubbornly high.

"While economic growth around the world is softening in the face of higher interest rates, major central banks are signalling that interest rates may have to rise further to restore price stability," a release from the Bank reads.

We have increased our policy interest rate to 4.75%.

Find out more: https://t.co/hZHWuTyIz0#economy #cdnecon pic.twitter.com/t9o715An99

— Bank of Canada (@bankofcanada) June 7, 2023

"The labour market remains tight: higher immigration and participation rates are expanding the supply of workers, but new workers have been quickly hired, reflecting continued strong demand for labour," it further stated, adding that, overall, excess demand in the economy looks to be more persistent than anticipated.

This was the Bank's second rate hike since January 2023. The next scheduled date for announcing the overnight rate target is July 12, 2023.