07:35 AM EST, 11/13/2025 (MT Newswires) -- Scotiabank said it thinks inflation risks are serious enough that the Bank of Canada is done cutting interest rates.

The bank considers the most recent cuts to be insurance against weaker outcomes, given the uncertainties being faced, noted Scotiabank.

That insurance isn't likely to be required until later next year, stated the bank. As a result, Scotiabank expects Governor Tiff Macklem and his colleagues will raise the policy rate by 50bps in the second half of 2026, reversing the most recent cuts.

It may well be that an earlier reversal of those cuts is required if the economy responds more forcefully to the government's transformation agenda than the bank has currently embedded into its forecast.

The BoC only expects 1.1% growth in real GDP next year, pointed out Scotiabank. The bar to exceed that doesn't seem particularly high, it added.