ottawathe bank of canada on wednesday increased its policy interest rate by a halfpercentage point its secondconsecutive jumbosized move and said that if necessary it is willing to act more forcefully to drive inflation down from near 7 to its 2 target the bank of canada lifted its target for the overnight rate by half a percentage point from 10 to 15 which marked the first time since the central bank adopted fixedannouncement dates in late 2000 that it delivered consecutive halfpoint rises all 12 economists surveyed by the wall street journal prior to wednesdays decision predicted a halfpoint increase the economists surveyed citing annual inflation at 68 or a 31year high and strong domestic demand also predicted another halfpoint rate rise at the central banks next scheduled policy decision in july the bank of canada raised the possibility of bigger rate increases in a statement accompanying its decision it said annual inflation was well above target of 2 and expected the consumerprice index to move higher in the near term before easing it added the economy is strong and is clearly operating in excess demand or an environment in which there arent enough goods and services to meet consumer needs the bank of canadas governing council which decides rate policy continues to judge that interest rates will need to rise further the statement said the governing council is prepared to act more forcefully if needed to meet its commitment to achieve the 2 inflation target the central bank added the risk that elevated inflation expectations become entrenched has risen