Bank of Canada keeps policy rate unchanged at 1.5%

In a widely expected decision, the Bank of Canada has announced its decision to keep the policy, overnight, rate unchanged at 1.5%. Below are the key takeaways from the official statement. 

• The Bank expects CPI inflation to move back towards 2 per cent in early 2019, as the effects of past increases in gasoline prices dissipate.
• Wage growth remains moderate.     
• Elevated trade tensions remain a key risk to the global outlook and are pulling some commodity prices lower. 
• GDP growth is expected to slow temporarily in the third quarter, mainly because of further fluctuations in energy production and exports.
• While uncertainty about trade policies continues to weigh on businesses, the rotation of demand towards business investment and exports is proceeding. 
• Recent data reinforce Governing Council’s assessment that higher interest rates will be warranted to achieve the inflation target.
• We will continue to take a gradual approach, guided by incoming data.
• The Bank is also monitoring closely the course of NAFTA negotiations and other trade policy developments, and their impact on the inflation outlook.