Bank of Canada set to make interest rate announcement

The Bank of Canada left interest rates unchanged at 2.25 per cent Wednesday, in its fifth monetary policy decision of the year.

Economists widely expected the central bank would remain on hold.

Inflation has jumped above three per cent in recent months as higher oil prices from the Iran war sent gasoline costs skyrocketing over the spring.

Officials at the Bank of Canada have made clear they’re willing to look beyond the initial price shock from the war but are prepared to act if there are signs inflation is spreading beyond the gas pumps.

The bank will also publish new forecasts this morning showing how the Iran war and other forces shaping the economy are affecting its outlook for growth and inflation.

Recent data on growth and the labour market suggest the economy is rebounding modestly from a weak first quarter.

Bank of Canada Governor Tiff Macklem is scheduled to speak to the media later this morning.

– with files from Global’s Ariel Rabinovitch