Bank of Canada expected to hold key interest rate at 2.25%

The Bank of Canada is widely expected to keep its benchmark interest rate unchanged at 2.25 per cent for a sixth consecutive decision this week.

An economic forecaster says that just a week ago, a tentative Middle East peace deal seemed likely to keep inflation in check.

But now he says the U.S. and Iran’s latest strikes threaten to undo recent progress at the pumps.

Governor Tiff Macklem says the central bank will look into the initial inflation spike caused by high gas prices but will step in if those costs drive up prices elsewhere.

Along with Wednesday’s interest rate decision, the Bank of Canada will reveal its latest economic and inflation forecasts.

With Files From The Canadian Press

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