OTTAWA — The Bank of Canada (BoC) left its benchmark interest rate unchanged at 2.25% on Wednesday, maintaining its current monetary policy stance as policymakers assess inflation, economic growth and ongoing global trade risks.
The decision, the central bank’s fifth policy announcement of 2026, was widely anticipated by financial markets and economists.
Bank of Canada Governor Tiff Macklem said the Canadian economy continues to face challenges from trade tensions and tariffs involving the United States, which have contributed to uneven economic performance over the past year.
“Canada’s economic growth has been volatile as businesses and households adjusted to higher tariffs, persistent uncertainty and slower population growth,” Macklem said while outlining the bank’s latest policy decision.
Canada entered a technical recession earlier this year after gross domestic product (GDP) contracted for two consecutive quarters. However, recent economic indicators suggest the slowdown may be easing.
Economic activity strengthened in April, while the national unemployment rate declined to 6.5% in June. Inflation has remained above 3%, driven largely by rising fuel prices linked to the conflict involving Iran, although underlying core inflation has shown signs of moderation.
Macklem said the latest data indicate that economic growth has resumed during the second quarter, offering cautious optimism despite lingering inflationary pressures and uncertainty surrounding global trade.
The Bank of Canada signaled it will continue to monitor inflation, labour market conditions and international developments before considering any future adjustments to interest rates.
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