Canada Freezes Interest Rates Amid Global Economic Uncertainty

The Bank of Canada has kept its overnight rate at 2.25 per cent for the seventh consecutive time, meeting analysts' expectations. The central bank noted that the Canadian economy is showing signs of growth after a stagnant period in 2025. However, it warned that the ongoing tariff war with the United States and the risk of inflation could lead to a change in interest rates.

The Bank of Canada's decision comes as the federal government considers extending its excise tax on gasoline and diesel until January 31. The initial deadline was September 7. Finance Minister Francois-Philippe Champagne is set to make an announcement later today, which would cut gasoline prices by 10 cents per litre and diesel prices by four cents.

Meanwhile, tensions in the Middle East have escalated after the United States struck Iranian targets on Tuesday. Iran retaliated with attacks on US facilities in Bahrain, Jordan, and Kuwait. The US reported that about 17 million barrels of oil passed through the Strait of Hormuz on Monday, the highest amount since the conflict began on February 28.