Bank of Canada holds key rate at 2.25% amid inflation and growth concerns

The Bank of Canada kept its benchmark interest rate at 2.25% on Wednesday, marking a fifth straight hold. Officials said the decision was meant to balance inflation risks from higher energy prices with signs that the Canadian economy remains weak. Governor Tiff Macklem said the central bank is watching the effects of the Middle East war on oil prices, as well as uncertainty tied to trade tensions with the United States. While inflation rose to 2.8% in April, the bank said there is still limited evidence that higher energy costs are spreading widely through consumer prices. Macklem also said Canada’s economy is not clearly in recession, even though recent growth has been flat and firstquarter GDP slipped slightly. Economists largely expected the rate to stay unchanged, and some now expect the Bank of Canada to keep policy steady for the rest of the year.