Bank of Canada expected to hold interest rate steady

(Horizon Media / OTTAWA) — The Bank of Canada is widely expected to keep its policy interest rate unchanged at 2.25 per cent when it announces its latest decision on Wednesday.

Economists say the central bank remains caught between persistent inflation pressures and signs that economic growth is still fragile. While headline inflation has risen, underlying measures remain closer to the Bank’s two-per-cent target.

Recent employment gains and a slight decline in the unemployment rate have also reduced pressure for an immediate rate cut. At the same time, weak business investment and modest economic growth make a rate increase unlikely.

A decision to hold rates would leave borrowing costs largely unchanged for Canadians with variable-rate mortgages, lines of credit and other loans linked to commercial banks’ prime rates.