Experts expect the Bank of Canada to likely announce another significant increase in the interest rate on Wednesday as it tries to rein in inflation.

After keeping the main interest rate near zero since March 2020, the central bank revealed a pair of interest rate hikes in March and April – the second by half a percentage point, the largest in 22 years.

Nathan Janzen, Senior Assistant Economist at the Royal Bank of Canada, said it is widely expected that the rate will jump by another half percentage point to 1.5 percent, "with the possibility of more increases in the coming months."

These moves represent an attempt to fight inflation, which is rising at the fastest pace since the early 1990s.

Stephen Tapp, Chief Economist at the Canadian Chamber of Commerce, says a new survey shows that rising input costs are among the biggest obstacles facing businesses, leading to higher prices and the urgent need to keep interest rates high.

He said in a statement issued on Monday: "These cost pressures will continue to fuel inflation, which will add further pressure on the Bank of Canada to continue raising interest rates at an aggressive pace in its attempt to control inflation."

Statistics Canada reported earlier this month that the Canadian Consumer Price Index rose by 6.8 percent in April compared to the previous year.

Grocery products jumped by 9.7 percent, the largest increase since September 1981 – while gasoline prices rose by 36.3 percent year over year.