The Bank of Canada announced earlier this morning they are holding their key interest rate at 2.25%, for the seventh consecutive decision. The last time the interest rate was held steady for seven straight decisions was from September 2023 to April 2024.
The Bank cited a slight rise in inflation to 3% in July after international pressures brought volatility to fuel prices as one reason to hold the rate. They also commented on United States tariffs and Canadian counter-tariffs, and the recent breakdown in trade talks, saying both situations are fluid.
Canada's economy strengthened in Q2 of this year, with the Bank citing a raise in GDP by 3.3%, after notably weak growth in the first quarter.
"With the economy and inflation evolving broadly as forecast in the July MPR, Governing Council agreed to leave the policy rate unchanged. However, the upside risks to inflation have increased, while new tariffs make growth prospects more uncertain," read part of the Bank's interest rate decision.
They also said the Bank of Canada remains committed to maintaining Canadians' confidence in price stability, despite global uncertainty.
