Deanne Whelan

On Wednesday, September 2, 2026, the Bank of Canada held its overnight lending rate steady at 2.25% where it has now remained for almost a year. This move was widely expected by analysts.

Gross Domestic Product (GDP) grew by 3.3% in the second quarter, while the unemployment rate edged down to 6.4% in July. Combined with persistently high oil prices, the risk of broader inflationary pressures and the potential impact of Canadian counter-tariffs taking effect September 8, these factors could shift the probability back towards a potential rate hike in the not-too-distant future.

Inflation fears around the world are once again already causing financial conditions to tighten. The Bank noted that, “long-term bond yields have moved up globally, including in Canada,” which means borrowers are already facing higher fixed mortgage rates, similar to what happened back in March and April 2026.

https://www.crea.ca/media-hub/news/bank-of-canada-holds-rate-at-2-25-as-inflation-risks-rise/