Bank of Canada Expected to Hold Rate at 2.25%

OTTAWA — The Bank of Canada is set to announce its latest decision on the policy interest rate today, with economists anticipating no change to the current benchmark of 2.25 percent. The central bank will also release its updated Monetary Policy Report, offering fresh economic forecasts amid ongoing uncertainties in the global trade environment.

The decision comes at a pivotal moment for Canada's economy, which has shown signs of softening since the bank's last meeting in December. Recent data indicates a slight easing in inflationary pressures, with the December trimmed-mean Consumer Price Index year-over-year measure falling to 2.7 percent from 2.9 percent the previous month. Unemployment also rose to 6.8 percent in December, up from 6.5 percent in November, highlighting underlying weaknesses that the bank had previously flagged in stronger GDP and employment figures.

Business sentiment provides additional context for the bank's cautious approach. In its latest business outlook survey released last week, the Bank of Canada noted that confidence among Canadian firms remained subdued at the end of last year, though it had improved from the lows reached in the second quarter of...