Bank of Canada holds key rate at 2.25 per cent once again

The Bank of Canada kept its benchmark policy rate unchanged at 2.25% for the seventh consecutive time, citing uncertainty from new U.S. tariffs and the ongoing war in Iran. In remarks, Governor Tiff Macklem said the persistence of the Middle East conflict has increased inflationary risks as global energy prices remain volatile. He added that a renewed escalation of the trade dispute with the United States could affect Canada’s economic rebound by prompting businesses to delay investment and hiring. The central bank noted inflation rose to 3% in July, while growth rebounded with 3.3% annualized expansion in the second quarter. Canada plans retaliatory tariffs beginning Sept. 8.