The Bank of Canada maintained its policy rate at 4.5 per cent, following eight consecutive rate hikes since March. The pause was signalled by the central bank in January, in order to assess the full impacts its monetary policy is having on the Canadian economy.
The current inflation rate sits at 5.9 per cent, reflecting a decrease in prices for energy, durable goods and some services. Despite this, food and shelter costs remain elevated, with food inflation at 10.4 per cent.
Despite the pause, the central bank has not ruled out the need to increase its overnight rate again, if economic circumstances change. Global factors, such as the war in Ukraine and the strength of China’s economic recovery, continue to be sources of uncertainty for the inflation outlook.