BoC Officials Split on Economic Rebound Sustainability

Bank of Canada officials were split on the sustainability of recent economic growth, according to deliberations from the central bank's rate decision in July. The central bank held its benchmark interest rate steady at 2.25% for a sixth consecutive time, and minutes from the governing council's discussions showed that while they were growing more confident in the economy after a year of flat growth, there was a range of views on how long this rebound would last.

The council noted that higher global oil prices and signs of recovery in the housing market had been supporting growth over the previous three months. Business surveys and an increase in exports suggested firms were adapting to tariffs and trade uncertainty from the United States, but the possibility of new U.S. tariffs remained a downside risk to growth.

The central bank expects real GDP rose 2.5% on an annualized basis last quarter, with modest growth forecasted through the second half of this year and into 2027. While inflation ticked up to 3.2% in May, there were few signs it was spreading beyond gas prices, which had cooled down to 2.8% by June.