Bank of Canada holds interest rates steady amid economic uncertainty
The central bank kept its benchmark rate at 2.25 per cent as it waits for clarity on global trade and inflation impacts.
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The Bank of Canada delivered a fifth consecutive hold on its benchmark rate Tuesday, keeping it at 2.25 per cent as the central bank waits for more clarity on how global economic turbulence will affect growth and inflation.
The decision comes after mixed economic signals. Statistics Canada reported the economy contracted marginally in the first quarter on an annualized basis, undershooting the central bank's expectations. But the agency also said the economy added a surprise 88,000 jobs in May, partially offsetting employment losses since the start of the year.
Inflation jumped to 2.8 per cent in April, driven partly by energy price shocks from conflict in the Middle East. The Bank of Canada has largely kept to the sidelines this year, waiting to see how the Iran war and U.S. trade uncertainty play out before making its next move.
For Toronto households and businesses, the rate hold means borrowing costs stay put for now — a small relief in a period of economic volatility.