The Bank of Canada left its benchmark interest rate unchanged at 2.25 percent on September 2, 2026, while indicating that additional interest-rate increases could become necessary if inflation remains elevated.
Governor Tiff Macklem said inflation had increased to approximately three percent, above the central bank's two percent target. Higher global oil prices associated with conflict involving Iran were identified as an important source of additional inflation pressure.
The central bank had maintained the policy rate at the same level for eleven consecutive months. Its September statement removed earlier language indicating that the existing rate was appropriate for balancing inflation and economic growth, increasing expectations that monetary policy could become tighter.
Canada's economy expanded at an annualized rate of approximately 3.3 percent during the second quarter of 2026. The central bank also continued monitoring international trade conditions, including new United States tariffs and their effects on Canadian exports.
Following the announcement, financial markets increased expectations for possible interest-rate increases later in 2026. The Canadian dollar strengthened modestly and Canadian government bond yields also moved higher.
