Bank of Canada set to keep interest rate unchanged as oil prices push inflation higher

The Bank of Canada is expected to keep its benchmark interest rate unchanged at 2.25 percent when it announces its latest decision.

The central bank will also release its updated economic outlook in its quarterly monetary policy report.

Economists say the decision comes as policymakers weigh competing pressures on inflation and economic growth.

Earlier forecasts had suggested inflation would ease this year, allowing the bank to hold rates steady while monitoring global trade conditions.

However, rising tensions in the Middle East have pushed oil prices higher, complicating the outlook. The increase has driven inflation up to 2.4 percent as of March.

Governor Tiff Macklem has said the bank will respond carefully to the changes. He noted that policymakers will “look through” the initial inflation spike linked to higher oil prices, while ensuring that price pressures do not become long lasting.

The decision reflects ongoing uncertainty around global markets, energy prices and trade, all of which are influencing Canada’s economic path.