Bank of Canada Holds Interest Rate Amid Trade Tensions

The Bank of Canada has maintained its target interest rate at 2.25 per cent, despite concerns over inflation and the impact of new tariffs on trade.

Governing Council noted that while Canadian economic activity strengthened in the second quarter, with GDP up by 3.3 per cent, some of this growth was due to temporary factors.

The Bank also acknowledged that uncertainty is high, citing ongoing global headwinds such as the Middle East conflict and new U.S. tariffs, which pose risks to the sustainability of the recovery.