BoC Expected to Hold Interest Rate as Trade War Escalates

Experts at Ratehub.ca predict that the Bank of Canada will hold its key overnight interest rate at 2.25% as the trade war between Canada and the US intensifies.

This decision is influenced by the current inflation rate, which stands at 3%, above the Bank's target of 2%. The Consumer Price Index (CPI) rose from 2.8% in June to 3% currently.

According to Jamie David, vice president of mortgages at Ratehub.ca, 'the Bank is widely expected to keep its overnight rate unchanged at next week's September announcement.'

David notes that the BoC is in a 'bind' as it assesses the impact of escalating trade tensions on both inflation and economic growth.