Bank of Canada to make interest rate announcement amid turbulent economy

The Bank of Canada is set to make an interest rate announcement this morning after a turbulent period of economic data.

The central bank is widely expected to deliver a fifth consecutive hold to its benchmark rate, which stands at 2.25 per cent.

The Bank of Canada has largely kept to the sidelines this year as it waits for more clarity on how the Iran war and U.S. trade uncertainty will impact economic growth and inflation.

Statistics Canada says the economy contracted marginally in the first quarter on an annualized basis, undershooting the central bank’s expectations.

The agency also said the economy added a surprise 88,000 jobs in May, partially offsetting a decline in employment since the start of the year.

The latest price data showed the annual rate of inflation jumped to 2.8 per cent in April as the energy price shock from conflict in the Middle East has consumers paying more at the pumps this spring.