The Bank of Canada is widely expected to keep interest rates at current levels following its latest policy meeting on July 15.
Economists widely expect Canada’s central bank will remain on hold, keeping its trendsetting overnight interest rate at its current level of 2.25%.
This will be the Bank of Canada’s fifth interest rate decision of the year and comes as the economic outlook is complicated by geopolitical uncertainty and weak domestic demand.
Inflation in Canada has risen above 3% as higher oil prices from the Iran war sends gasoline prices soaring. The central bank targets inflation at an annualized 2%.
At the same time, Canada entered a recession earlier this year following two consecutive quarters of economic contraction.
Officials at the Bank of Canada have said repeatedly that they are prepared to act on interest rates if there are signs that inflation is worsening across the country.
However, economists expect the Bank of Canada will remain on the sidelines for now given the fragile state of the Canadian economy and signs that the labour market remains soft.
After July 15, the Bank of Canada next decides on interest rates Sept. 2.
