Bank of Canada keeps its rate at 2.25%

The Bank of Canada kept its overnight interest rate at 2.25% on September 2. It said the economy and inflation had developed broadly as expected in its July outlook, so policymakers left the rate unchanged.

The Bank also pointed to risks on both sides. Higher energy prices and new US tariffs could add to costs, while trade uncertainty could make the growth outlook less certain. Canada’s unemployment rate had eased to 6.4% in July, although the Bank said labour demand remained subdued.

A steady policy rate does not mean household borrowing costs are fixed: variable-rate loans may respond differently from fixed-rate mortgages, and lenders consider more than the Bank’s overnight rate.