Bank of Canada raises interest rates by 0.25%

The Bank of Canada announced on Tuesday 19 October that it is raising its target for the overnight rate by one-quarter of one percentage point to 2 1/2 per cent. The bank said that given the effects of higher oil prices and the past appreciation of the Canadian dollar, it projects growth to be slightly less than 3 per cent in 2005.

The operating band for the overnight rate is correspondingly increased, and the Bank Rate is now 2 3/4 per cent.

The Canadian economy is operating near its productio