Bank of Canada Holds Fire as Canada-US Trade War Escalates

The Bank of Canada has decided to hold its key interest rate at 2.25 percent, marking the seventh consecutive time it has chosen not to raise rates. This decision comes amidst escalating tensions in the Canada-US trade war, which has seen US President Donald Trump impose 50 percent tariffs on a range of Canadian goods.

The Bank's decision is seen as a deliberate pause for information, according to Michael Constantino, CEO of WeBull Canada. The central bank will be weighing the impact of rising inflation against the economic effects of the trade war.

Canada's economy grew 0.8 percent in the second quarter, up from 0.1 percent during the first three months of the year. Meanwhile, annual inflation increased to three percent in July from 2.8 percent in June.