Bank of Canada Holds Policy Rate Amid Global Economic Uncertainty

The Bank of Canada has held its target for the overnight rate at 2.25%, maintaining the current policy rate despite ongoing global economic uncertainty.

The conflict in the Middle East, now in its fourth month, is contributing to increased energy prices and disruptions in global supply chains, weighing on global growth and pushing up inflation.

In Canada, GDP edged down by 0.1% in the first quarter, with consumer spending growing 1.4% but government spending unexpectedly declining.

The Bank of Canada is continuing to look through the war's near-term impact on headline inflation, but will not let higher energy prices become persistent inflation.