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Get email updates from your favourite authors. Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account Share your thoughts and join the conversation in the comments Enjoy additional articles per month Get email updates from your favourite authors Sign In or Create an Account or “Since our last decision in July, the conflict in the Middle East has persisted without a clear path to resolution.
Closer to home, the United States has imposed new tariffs on Canadian exports, and the Canadian government has responded with proportionate counter-tariffs and new supports for hard-hit businesses and workers,” Bank of Canada governor Tiff Macklem said in prepared remarks. “With recent data coming out largely in line with our July forecast, we decided to maintain the policy interest rate at 2.25 per cent.” SUBSCRIBER EXCLUSIVE: FP West: Energy Insider brings you behind the oilpatch’s closed doors with exclusive insights from insiders every Wednesday morning. By signing up you consent to receive the above newsletter from Postmedia Network Inc.
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We encountered an issue signing you up. Please try again The central bank’s decision follows trade negotiations between Canada and the U.S. breaking down at the last minute, which led to the implementation of Section 338 tariffs on Aug. 22. Canada announced “dollar-for-dollar” tariffs on approximately $27.6-billion worth of U.S. goods in response, which will come into effect on Sept. 8 if negotiations don’t resume.
The hold also comes after Canada’s inflation rate edged up to three per cent in July due to higher gasoline prices as the blockade of the Strait of Hormuz drags on. Core inflation also rose slightly in July, but remained relatively stable, with CPI-median hovering at two per cent while CPI-trim was 1.9 per cent Macklem said that even though economic growth in Canada has picked up after stalling over the past year, the elevated uncertainty from the trade war has called the sustainability of the rebound into question. The ongoing conflict in the Middle East has also kept energy prices higher for longer, which has increased upside risks for the central bank’s inflation outlook.
“Monetary policy cannot offset the effects of tariffs or influence global energy prices. What we can do is ensure global developments don’t jeopardize price stability in Canada,” Macklem said. “Governing council will assess the sustainability of the economic rebound and the outlook for inflation, and is prepared to adjust monetary policy as needed.
The bank remains committed to maintaining Canadians’ confidence in price stability through this period of global upheaval.” More to come... Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here .
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Source: Financial Post
