In its interest rate announcement, which was in line with market expectations, the central bank signalled that further monetary tightening may be needed to manage the risk of inflation, but said it would proceed cautiously given the considerable uncertainty about developments.
According to the bank's forecast, inflation is set to rise to 3.1 percent in early 2027 and is not expected to return to the 2 percent target until the middle of next year.
The Bank of Canada’s announcement comes hours before the US Federal Reserve (Fed) announces its interest rate decision at 7 p.m. local time in Sweden.
