Bank of Canada Holds Key Rate at 2.25 Percent, Says Higher Inflation Risks Have Increased
OTTAWA—The Bank of Canada has held its key interest rate steady at 2.25 percent for a seventh consecutive meeting, while warning that higher oil prices and tariffs are putting increased upward pressure on inflation. “The longer oil prices and refinery margins stay high, the greater the risk that higher energy prices spill over and turn into persistent inflation. In addition, the new U.S. tariffs and the Canadian counter-tariffs could add costs for some businesses and feed into consumer prices over time,” Bank of Canada Governor Tiff Macklem told reporters in Ottawa on Sept. 2. Macklem said recent economic data had been largely in line with the Bank’s July forecast, leading it to maintain the interest rate at 2.25 percent. However, he said the “upside risks” to inflation had increased and that the Bank would adjust monetary policy as needed....
The Bank of Canada has maintained its key interest rate at 2.25 percent for the seventh consecutive meeting. Governor Tiff Macklem warned that elevated oil prices and tariffs are increasing the risk of persistent inflation. Despite economic data aligning with forecasts, the bank acknowledges heightened upside risks to inflation and will adapt monetary policy as required.
- The Bank of Canada has held its key interest rate steady at 2.25 percent.
- Higher oil prices and tariffs are identified as factors increasing upward pressure on inflation.
- The Bank of Canada Governor Tiff Macklem stated that the longer oil prices and refinery margins remain high, the greater the risk of persistent inflation.
- New U.S. tariffs and Canadian counter-tariffs could increase business costs and consumer prices.
- Recent economic data is consistent with the Bank’s July forecast.
- The Bank acknowledges increased ‘upside risks’ to inflation and will adjust monetary policy as needed.
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