OTTAWA—The Bank of Canada has held its key interest rate steady at 2.25 percent for a seventh meeting in a row, while warning that higher oil prices and tariffs are putting more 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 US 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 on Sept. 2.
Macklem said the recent economic data had been in line with the Bank’s July forecast, which had led it to maintain the interest rate at 2.25 percent. But he said the “upside risks” to inflation had increased, and the Bank will adjust monetary policy as needed….