The Bank of Canada (BoC) is set to issue the first interest rate update of the year next week on Wednesday, January 24.

The announcement will come at 10 am ET.

Canada's central bank held the key interest rate at 5 per cent in the last update in December.

It was the fourth consecutive rate hold of the year after Canadians saw seven interest rate hikes in 2022. In January 2023, another increase followed, bringing the key rate to 4.5 per cent.

The bank held its key rate at 4.5 per cent — precisely as experts predicted — until June 7, when it was raised to 4.75 per cent. On July 12, the BoC brought the key rate to 5 per cent, with the bank rate at 5.25 per cent, and on September 6, it announced that it was holding those rates.

In a recent report, Oxford Economics researchers said they believe the 5 per cent key rate will be held until the middle of 2024 when the BoC will trigger a cycle that lowers the rate.

On Tuesday, Statistics Canada's Consumer Price Index showed that inflation had risen once again in Canada to 3.4 per cent, which squashes hopes of an early dip in the rate but doesn't necessarily ring alarm bells for a possible hike.

With this in mind, industry experts are almost sure another rate hold is coming.

Ratehub.ca Co-CEO and President of CanWise mortgage lender James Laird shared his thoughts and expectations for the upcoming BoC announcement.

"It will be a shock if the BoC announces anything but a hold to the key overnight rate," shared Laird. "With the recent higher-than-expected inflation data, it will be interesting to see if they are 'prepared to raise the policy rate further if needed,' which they stated in previous announcements but dropped in December's announcement."

He believes that if the BoC considers raising rates further, we can expect bond yields to push up and fixed rates to rise.

"Anyone with a variable-rate mortgage or home equity line of credit (HELOC) can expect their rate to remain unchanged but will be reading the bank's language closely to see if a rate hike or rate cut is more likely moving forward," Laird told us.

He believes the tone of the January 24 announcement will influence whether the housing market gets off to a strong start and that discussion of rate hikes will mean "a sluggish start to real estate activity in 2024."

"With upward pressure on fixed rates, getting a pre-approval is a great idea," he advised.