Bank of Canada Holds Rates Amid Inflation Risks

The Bank of Canada maintained its policy rate at 2.25% on Wednesday, weighing a strong domestic economy against rising inflation risks from oil prices and trade uncertainty.

The central bank's decision was in line with its July outlook, but policymakers noted increased risks to inflation and uncertainty over new U.S. tariffs.

Canada's economy rebounded in the second quarter, driven by growth across consumption, housing, exports, and business investment.

Inflation has hovered around 3% in recent months, mainly due to higher gasoline prices, with core measures close to 2%. The Bank warned that upside risks to its inflation forecast have increased due to ongoing Middle East tensions and Strait of Hormuz disruptions.