Bank of Canada Holds Interest Rate Amid Escalating Trade Tensions

The Bank of Canada has kept its key interest rate unchanged at 2.25 percent following the escalation of the Canada-US trade war.

This marks the seventh consecutive time the central bank has held rates, down from a recent peak of five percent.

US President Donald Trump imposed 50 percent tariffs on various Canadian goods, prompting retaliatory measures from Canada covering over $20 billion in goods set to take effect on September 8.

Canada's economy grew 0.8 percent in the second quarter, and annual inflation increased to three percent in July from 2.8 percent in June.