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The Bank of Canada has left its benchmark interest rate unchanged at 2.25%, citing ongoing global uncertainty and elevated inflation risks.
While Canada's economy remains weak—with GDP slipping 0.1% in the first quarter, sluggish business investment, softer housing activity, and unemployment holding at 6.6%—the Bank expects modest growth to resume in the second quarter. Inflation rose to 2.8% in April, largely driven by higher energy prices linked to the prolonged Middle East conflict, though underlying inflation measures have eased closer to the Bank's 2% target.
Global factors, including rising oil prices, supply chain disruptions, and continued uncertainty around U.S. trade policy, are weighing on the economic outlook.
Despite these challenges, the Bank believes excess supply in the Canadian economy will help contain inflation pressures and remains prepared to adjust monetary policy if needed to keep inflation under control and maintain confidence in price stability.
The next scheduled date for announcing the overnight rate target is July 15, 2026. The Bank's next MPR will be released at the same time.
Source: Bank of Canada
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