Bank of Canada Holds Rate Steady Amid Global Economic Uncertainty
The Bank of Canada has held its benchmark interest rate at 2.25 per cent for the seventh straight time, as global economic uncertainty continues to weigh on the Canadian economy.
Bank of Canada Governor Tiff Macklem said that the ongoing conflict in the Middle East and the subsequent increase in global energy prices have increased inflationary risks.
The US has imposed 50 per cent tariffs on a range of Canadian goods, which could hit targeted sectors hard. However, Macklem noted that exports were on the rise, and businesses were adapting to trade restrictions.
Inflation rose to three per cent in July due to volatile gas prices during the spring and summer, but economic growth has shown signs of rebounding with a 3.3 per cent annualized growth in the second quarter.