North America

Bank of Canada Holds Policy Rate at 2.25% as Inflation Risks Rise

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Courtroom-sketch editorial illustration of the Bank of Canada's modern glass office complex seen from street level at dusk, rendered in warm ochre and slate-blue pastel strokes.

The Bank of Canada held its overnight policy rate at 2.25% on Wednesday, while keeping the Bank Rate at 2.5% and deposit rate at 2.20%. It said Canadian GDP grew 3.3% in the second quarter and unemployment edged down to 6.4% in July, but excess supply remains. Governor Tiff Macklem said inflation risks had risen as high oil prices, restricted Strait of Hormuz shipments, U.S. tariffs and Canadian counter-tariffs clouded the outlook. The Bank said CPI has hovered near 3%, while CPI excluding gasoline was 2.2% in July; its next decision is due October 28.

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