What to expect from July's Bank of Canada interest rate update
Another Bank of Canada (BoC) interest rate update is scheduled this month, and you may be bracing yourself for the Crown corporation’s latest decision.
In June, Canada’s central bank held its key interest rate at 2.25 per cent for the fifth time since October 2025. The governing council cited that the “conflict in the Middle East” continues into its fourth month.
“The resulting increases in energy prices and disruptions in global supply chains are weighing on global economic growth and pushing up inflation,” reads the June announcement. “At the same time, the US administration continues to propose new tariffs and trade policy uncertainty remains elevated.”
The Bank of Canada noted that the inflation rate reached 2.8 per cent in April, reflecting higher oil prices and the impact of the government axing the consumer carbon tax.
“Economic activity in Canada has been weak, and uncertainty about U.S. trade policy persists. The conflict in the Middle East is ongoing, and oil prices remain elevated,” reads the announcement. “Governing Council is continuing to look through the war’s near-term impact on headline inflation, but will not let higher energy prices become persistent inflation.”
As the same global issues persist, here’s what experts predict from the next BoC rate announcement on Wednesday, July 15.
Will the Bank of Canada change the interest rate?
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NerdWallet Canada expert Clay Jarvis says that due to the recent technical recession conversations and higher inflation, there’s a “will they won’t they” around the upcoming Bank of Canada rate decision.
“But the opposing nature of Canada’s current economic maladies explains why the Bank’s likely to continue holding the overnight rate on July 15,” he explains in a statement.
When the country is experiencing a slow economy, the BoC typically lowers interest rates, while increasing inflation usually means rate hikes.
“Treating one condition could exacerbate the other, so it looks like the Bank will go the ‘do no harm’ route and maintain the overnight rate at 2.25 per cent,” says Jarvis.
He adds that Canada’s GDP grew by a “healthy 0.5 per cent” in April, which means “the economy isn’t presently in need of life support.”
Overall, Jarvis says the central bank is in a position to ride out the wave of uncertainty caused by the war between the U.S. and Iran and CUSMA negotiations. He adds that the BoC has the leeway to decide later whether inflation or economic growth should be its priority.
Here’s how you can stay up to date with the Bank of Canada interest rate updates in 2026.