Economists are expecting the Bank of Canada to continue its aggressive rate hike campaign after inflation data came in higher than expected.

The latest data released by Statistics Canada on Wednesday shows the consumer price index (CPI) up 6.9 per cent year-over-year in September. Economists tracked by Bloomberg were expecting a 6.7 per cent increase.

Amid stickier-than-expected inflation figures, here is how economists are now predicting the central bank will respond.

BANK OF MONTREAL

Bank of Montreal Chief Economist Douglas Porter said in a note to clients Wednesday that he is expecting a “like-sized 75 basis-point (bps) hike next week from the Bank.” 

Porter said the move would bring the overnight rate to four per cent. Additionally, he is currently predicting a 25 basis-point hike in December. 

“Bluntly, inflation did not ease as much as anticipated last month, even as gasoline costs took a big step back. Underlying inflation remains extremely persistent and sticky at above 5 per cent,” Porter said in the note. 

Sticky inflation figures, coupled with hawkish rhetoric from the Bank of Canada, a weak Canadian dollar and a likely 75 basis-point hike from the U.S. Federal Reserve at its next meeting all signify a probable 75 basis-point hike, Porter said. 

CANADIAN IMPERIAL BANK OF COMMERCE

Benjamin Tal, the deputy chief economist at CIBC, said in an email Wednesday that he predicts a 75 basis-point hike from the central bank. A move that would be in accordance with market expectations. 

Karyne Charbonneau, an economist at CIBC, said in a note to investors Wednesday that the central bank continues to have “work to do” in its fight to bring inflation closer to its two per cent target. 

“As such, we now believe the Bank will need to go with a 75 bps hike next week rather than the 50 bps we previously anticipated. The Bank might then be left with a last 25 bps in December if growth numbers support it,” Charbonneau said in the note.

TORONTO-DOMINION BANK

The Bank of Canada has hiked interest rates a cumulative 300 basis points this year, Leslie Preston, a senior economist and managing director at TD Bank, said in a release Wednesday. As a result, increases in the policy rate are starting to impact the economy.

Despite reductions in headline inflation figures, driven largely by falling gasoline prices, core inflation is still running hot, Preston said.

“Today's report emphasizes the need for a hefty 50 basis-point hike next week in the BoC's overnight rate. We expect the bank is getting closer to a pause on rate hikes, once it reaches four per cent by the end of the year,” Preston said.

THE BANK OF NOVA SCOTIA:

Derek Holt, a vice-president and head of capital markets economics at Scotiabank, said in a note to investors Wednesday that he expects the Bank of Canada to increase its policy rate by another 75 basis points next week. 

Holt said that he has been advocating for a 75 basis-point hike event before the release of Wednesday’s CPI figures.

“[Overnight index swap] pricing for next week’s BoC decision has moved from pre-data pricing around 60bps to over 75 bps now as a three-quarters of a percentage point rate hike is now fully priced,” Holt said adding that is consistent with his messaging to clients and staff.