BENGALURU, July 6 Reuters The Bank of Canada will raise interest rates by a quarterpoint for a second straight meeting to 5.00 on July 12 following a fivemonth pause earlier this year and then hold well into 2024, according to a majority of economists polled by Reuters.

While that is the new expected peak rate, this same group of economists had called 4.50 the top before the BoC39;s surprise June move, underscoring how persistently price pressures have lingered in an economy still performing well.

Inflation slowed sharply to 3.4 in May from 4.4 the prior month, but is well above the central bank39;s 2.0 target and not expected to reach it until early 2025.

So the BoC will press ahead and hike the overnight rate by 25 basis points to 5.00 on July 12, according to 20 of 24 economists in the June 28July 6 Reuters poll.

That would amount to 475 basis points in total since March 2022, taking the overnight rate to a new 22year high.

Economists appear more convinced of another rate rise than financial markets, which are pricing in a roughly 55 chance of a quarterpoint hike this month.

The slowdown in inflation may not be enough to remove another BoC rate hike from the table this month given stickier core rates of inflation, while a decent GDP report coupled with a tight job market suggests the economy remains sturdy, said Priscilla Thiagamoorthy, senior economist at BMO Capital Markets.

Gross domestic product was expected to grow at an annualized pace of 1.3 this year,…