BoC Signals Rate Hike Threat Amid Oil Price Pressure

The Bank of Canada's Governing Council signalled that it is prepared to raise interest rates in response to rising inflation concerns, despite keeping the benchmark rate at 2.25% for the seventh consecutive time.

The minutes from the council's September 2 decision revealed a deepening concern about inflation spreading beyond fuel prices, with policymakers citing the risk of higher energy costs spilling over into other components of the Consumer Price Index (CPI).

Canada's economy expanded at an annualized rate of 3.3% in the second quarter, but consumer spending and exports are expected to be impacted by new US tariffs, which cover roughly 5% of Canadian goods exports to the United States.