The Bank of Canada (BOC) on Wednesday announced that it is leaving its key interest rate at 4.5% for the second consecutive month.
Economists widely expected the central bank would continue the pause on its rate hiking cycle, which began in March 2022, based on data that suggested inflation would keep declining, BNN Bloomberg reported.
The central bank’s governing council, though, warned it could increase rates again if necessary.
The BOC added that persistent services inflation is the biggest upside risk.
Canada’s central bank also noted it sees inflation at 3% by midyear and 2.1% by the end of 2024.
As well, the BOC said it now sees GDP growth at 1.4% in 2023, 1.3% in 2024, and 2.5% in 2025.
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