Bank of Canada holds rate at 2.25% as economy rebounds

The Bank of Canada left its policy rate unchanged at 2.25 per cent on July 15, extending a pause that has now held through January and June at the same level. The decision came as the central bank pointed to signs that the economy is improving after a more difficult stretch earlier in the year and said inflation is expected to ease. For households, businesses and investors, the hold keeps borrowing costs anchored at a level that still shapes variable-rate mortgages, business loans and credit products across the country.

The Bank sets monetary policy on eight fixed dates each year, and the July decision was paired with the July 2026 Monetary Policy Report and a press conference in Ottawa with Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers. The Bank’s policy interest rate page showed the target overnight rate at 2.25 per cent on June 10, reinforcing how long policymakers have already stayed on the sidelines. That prolonged pause matters because even without a change, markets read every decision for clues about how soon relief might come.

The central bank is trying to thread a narrow path between backing growth and preventing price pressures from becoming entrenched. Its July materials kept the focus on growth, inflation and the policy outlook, while Macklem has already described Canada’s economy as “proving resilient” and said GDP would expand at a moderate pace in 2026 while inflation stayed close to target. The message from July was more cautious than aggressive: conditions have improved enough to avoid another cut, but not enough to justify a move in the other direction.

That leaves borrowers in a holding pattern. Homebuyers, mortgage holders and small businesses will continue to watch the Bank’s next announcements for signs that lower rates are coming back into view, but a steady 2.25 per cent overnight rate suggests policymakers are not rushing to stimulate demand. If growth softens or inflation wobbles, the Bank has room to change course at one of its fixed announcement dates. For now, Ottawa is signaling that the rebound has to prove itself before borrowing costs come down.