The Bank of Canada kept its overnight policy rate parked at 2.25% on June 10, marking the fifth straight meeting without a change. Governor Tiff Macklem acknowledged that energy prices, driven largely by the ongoing Middle East conflict, have climbed. But the central bank sees limited evidence of those costs bleeding into broader inflation.
The numbers behind the hold
Canada’s headline inflation hit 2.8% in April 2026. That’s above the BoC’s 2% target, but core inflation measures came in around 2.1%. The gap between headline and core tells a clear story: energy is doing the heavy lifting on price increases, not some systemic inflationary spiral.
The Bank Rate now sits at 2.5%, with the deposit rate at 2.20%. A Reuters poll of economists found broad consensus that the rate will hold through most of 2026.
Why energy prices haven’t triggered a broader response
