Bank of Canada holds key interest rate at 2.25% for sixth straight decision

The Bank of Canada has kept its benchmark interest rate unchanged at 2.25 per cent following its latest monetary policy decision on Wednesday, marking the sixth consecutive announcement with no change to the policy rate.

According to the Bank of Canada, the Governing Council, led by Governor Tiff Macklem, decided to maintain the current rate amid ongoing uncertainty surrounding global economic conditions. The central bank cited volatility in global oil prices linked to tensions in the Middle East and continued uncertainty over the Canada–United States–Mexico Agreement (CUSMA) as factors influencing the outlook.

The central bank also lowered its forecast for Canada's economic growth in 2026 to 0.7 per cent, down from its previous estimate of 1.2 per cent. It expects the economy to strengthen in 2027 and 2028, with real GDP growth projected at 1.8 per cent in each of those years.

Governor Tiff Macklem said inflation is expected to remain sensitive to gasoline prices in the near term. He added that inflation is projected to return to around the Bank of Canada's 2 per cent target by early 2027.