Bank of Canada to keep its key interest rate at quarter of one percent

The Bank of Canada is keeping its key interest rate at a quarter of one per cent, but warning it won't stay there much longer.

The bank rate has been at a rock-bottom low since March of 2020 when the pandemic put the economy into a downturn.

But with a stronger-than-expected rebound, the central bank says the economy is now running at capacity, which is why it's no longer promising to keep its key policy rate steady.

The Bank of Canada says rates will need to rise to bring inflation back to its target of two per cent, but warns inflation rates are likely to creep above five per cent for the first quarter before easing by the end of the year.