OTTAWA — The Bank of Canada has once again kept its target for the overnight rate unchanged at 2.25%, marking the seventh consecutive monetary policy decision in which the central bank has opted to hold borrowing costs steady.
The decision comes as the central bank navigates ongoing economic pressures, including uncertainties surrounding U.S. trade tariff policies and heightened volatility in global energy prices. The key policy rate has remained at the 2.25% level since late last year.
The rate hold follows recent data showing Canada’s annual inflation rate ticked up to 3% in July, largely driven by a surge in global fuel prices tied to escalating geopolitical conflicts in the Middle East. The spike in energy costs has injected notable volatility into the Consumer Price Index (CPI).
While domestic economic activity and the labor market have shown early signs of recovery, ongoing trade frictions with the U.S. continue to cast a shadow of uncertainty over the country’s long-term growth outlook.
Adding to the unusual backdrop of the announcement, an ongoing strike by Bank of Canada security staff forced the central bank to cancel its traditional pre-decision media lockup and technical briefing.
For Canadian consumers and businesses, the decision to leave the benchmark rate at 2.25% signals that prime rates, mortgage costs, and fixed-income yields are expected to remain broadly stable in the immediate term.
