Why did the Bank of Canada hold its policy rate at 2.25% for the sixth consecutive meeting?

The Bank of Canada held its policy rate at 2.25% because it sees the economy rebounding after a year of weakness, with growth expected to pick up and inflation easing gradually from its recent peak; officials judged the current rate as appropriate to sustain recovery and return inflation to the 2% target, while acknowledging ongoing uncertainty from geopolitical risks and trade tensions.

What key changes did the Bank of Canada make to its economic forecasts in this decision?

The Bank revised its 2026 growth forecast downward to 0.7% due to early-year weakness but raised its 2027 and 2028 growth forecasts to 1.8% each; it also increased its 2026 headline inflation forecast to 2.5% from 2.3%, while still expecting inflation to return to the 2% target by early next year, citing fading oil-driven price pressures and subdued core inflation.

Bank of Canada Holds Rates at 2.25% as Oil Price Outlook Fades

Jul 15, 2026

The Bank of Canada maintained interest rates at 2.25%, citing improved growth and fading inflation linked to energy prices, with forecasts predicting Brent crude to reach $70 per barrel by 2027.

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