Bank of Canada Holds Interest Rate Steady Amid Geopolitical Uncertainty

The Bank of Canada has decided to keep its key interest rate steady at 2.25 per cent, despite ongoing geopolitical tensions and economic uncertainty.

The bank's Governing Council pointed to the war in Iran, new American tariffs on Canadian goods, and stalled trade talks between the two countries as reasons for maintaining the current rate.

Canadian economic activity has shown signs of recovery, with real Gross Domestic Product growing by 3.3 per cent in the second quarter.

However, inflation remains a concern, hovering around three per cent due to higher gas prices and potential spillover effects into other goods and services.