Bank of Canada Expected to Hold Interest Rate Steady as Inflation Eases
The Bank of Canada is widely expected to keep its benchmark interest rate unchanged at 2.25 per cent when it announces its latest monetary policy decision on July 15, as easing inflation and signs of economic recovery reduce pressure for further rate cuts.
According to a Reuters survey of economists, the central bank is likely to maintain its current policy rate for the sixth consecutive meeting, reflecting growing confidence that inflation is gradually returning to the Bank’s 2 per cent target while the Canadian economy continues to recover.
The Bank of Canada last adjusted its benchmark rate in October 2025. Since then, policymakers have adopted a cautious approach, balancing the need to support economic growth with the risk of renewed inflationary pressures.
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Recent economic data have strengthened expectations that interest rates will remain on hold. Canada’s labour market added 18,200 jobs in June, while the unemployment rate edged down to 6.5 per cent. The figures suggest the economy is gradually stabilizing despite global trade uncertainties.
Although inflation briefly rose above the Bank of Canada’s target range earlier this year due to higher energy prices, core inflation has eased and business surveys indicate inflation expectations are moderating. Officials have said they will continue monitoring global oil prices, trade developments and domestic demand before considering any change in monetary policy.
Governor Tiff Macklem has previously stated that the central bank remains committed to maintaining price stability while ensuring temporary increases in inflation do not become persistent. The Bank has also warned that geopolitical tensions, higher energy costs and uncertainty surrounding trade policy continue to pose risks to Canada’s economic outlook.
Economists believe the Bank is unlikely to cut interest rates again unless economic conditions weaken significantly. Conversely, a sustained rise in inflation driven by higher energy prices could prompt policymakers to consider tightening monetary policy in the future.
The Bank of Canada’s interest rate announcement and updated Monetary Policy Report are expected to provide investors, businesses and households with fresh guidance on the country’s economic outlook for the remainder of 2026.