Bank of Canada Holds Interest Rate Steady Amid Global Economic Uncertainty
The Bank of Canada's Governing Council held its interest rate steady at 2¼% despite rising inflation and growth uncertainties. The council met from July 7 to 15, 2026, to discuss the global economic landscape. They noted that tensions in the Middle East had initially dampened global growth and driven oil prices to an all-time high of approximately $120 per barrel.
However, expectations were for a rebound in growth during the latter half of 2026 as oil prices slowly declined. The investment boom in artificial intelligence (AI) was cited as a key driver of increasing economic activity in various countries.
The council highlighted sluggish growth in Canada, with GDP stagnating between Q1 2025 and Q1 2026. However, indicators from the second quarter suggested a recovery, with exports picking up and investment in the oil and gas sector offering promising prospects for business investment recovery.