The Bank of Canada (BoC) kept its benchmark interest rate at 2.75 percent today, ending a seven-year streak of rate cuts. The decision came amid global economic uncertainty due to the ongoing trade war between the United States and its trading partners.
According to the BoC, there are signs of a slowdown in the economy, including in domestic consumption, residential investment and business spending. Lower-than-expected inflation data released yesterday also contributed to the decision.
The bank also warned that global trade tensions are derailing the recovery in the labor market, with the employment rate falling in March and companies now planning to slow hiring. Wage growth is also showing signs of slowing.
The BoC outlined two different scenarios for the economic direction, reflecting the high level of uncertainty resulting from erratic US trade policies under President Donald Trump.
