Bank of Canada Holds Off Rate Hike Amid Trade Risks

The Bank of Canada may hold off raising interest rates despite a rebound in inflation to three per cent last month, according to economists.

The annual rate of inflation rose from 2.8 per cent in June and was driven by global energy volatility, with gas prices up 25.7 per cent year-over-year.

Randall Bartlett, deputy chief economist at Desjardins, said the Bank of Canada will want to 'keep its powder dry' due to ongoing trade risks, particularly from potential U.S. tariffs that could pose a significant risk to economic growth.

Economists are not expecting the Bank of Canada to move off the sidelines anytime soon, with financial market odds standing at nearly 99 per cent in favour of an interest rate hold next month.