BoC Holds Rate Amid Strong Growth, Trade Risks

The Bank of Canada has decided to keep its key policy rate at 2.25% as strong economic growth in Canada provides a buffer against trade risks, including new US tariffs on Canadian goods.

CANADA'S ECONOMY GREW AT AN ANNUALIZED RATE OF 3.3% IN THE SECOND QUARTER, ABOVE THE CENTRAL BANK'S 2.5% FORECAST, AS EXPORTS JUMPED AND DOMESTIC DEMAND STRENGTHENED.

However, the ongoing conflict in the Middle East is keeping energy prices high, and new US tariffs and Canadian counter-measures have been announced following the breakdown of trade talks between Canada and the United States.