Bank of Canada holds at 2.25% as gasoline lifts inflation to 3.2%

The Bank of Canada left its overnight rate target at 2.25% on Wednesday, with the Bank Rate at 2.5% and the deposit rate at 2.20%. It was the fifth decision of 2026. Consumer price inflation ran at 3.2% in May, which the Bank attributed mainly to gasoline; excluding gasoline the figure was 2.2%, and core measures sat near 2%. The Bank projects growth of 0.7% this year and 1.8% in each of 2027 and 2028, with inflation back to about 2% in early 2027. Second quarter growth is estimated at 2.5%, which the Bank described as largely temporary factors unwinding. Governor Tiff Macklem said the Bank would not let higher oil prices become persistent inflation, and that increases could be needed if they spread to other goods and services. Reported by Ariel Rabinovitch at Global News. September 2 is next.