Bank of Canada holds at 2.25%: what to watch Oct. 28
What happened
On September 2, 2026, the Bank of Canada left its overnight policy rate at 2.25%. The Bank Rate stayed at 2.5% and the deposit rate at 2.20%. The central bank said inflation and growth have followed its July forecast, so it saw no need to move.
Annual consumer price inflation has hovered around 3% for several months, near the top of the Bank's 1% to 3% target range. Much of that comes from high gasoline prices linked to the conflict in the Middle East. Excluding gasoline, inflation was 2.2% in July, and the Bank's core measures sit close to 2%.
Growth has improved: GDP rose 3.3% in the second quarter after two weak quarters, and the unemployment rate eased to 6.4% in July. The Bank still sees spare capacity in the economy and notes that wage growth is subdued.
What it means for your budget
A hold means no new change in the policy rate that lenders use as a reference point. In general, borrowing costs that follow the policy rate, such as variable-rate mortgages and lines of credit, are not pushed higher or lower by this decision. Fixed mortgage rates depend more on bond markets, so they can move even when the policy rate does not.
The bigger pressure on household budgets right now is the price level, especially fuel. With headline inflation near 3%, everyday costs are still rising faster than the 2% midpoint the Bank aims for. It is a good moment to compare what you actually pay for gas, groceries and transport with your monthly plan.
If your mortgage renews soon or you plan to borrow, ask your lender how your rate is set, variable or fixed, so you know which type of news affects you.
What to keep in mind
The Bank said new U.S. tariffs cover about 5% of Canada's exports to the United States and it expects a limited direct effect, but trade uncertainty could weigh on hiring and investment. It also flagged higher inflation risks tied to oil prices and constrained shipping through the Strait of Hormuz, and said it is ready to adjust policy if needed.
The next scheduled announcement is Wednesday, October 28, 2026, at 9:45 a.m. ET. The figures above are from the Bank's September 2 statement and its summary of deliberations published September 16. This article is informational and is not financial advice.
Sources
- Bank of Canada: Monetary Policy Decision Press Conference Opening Statement
- Bank of Canada: Summary of Governing Council deliberations: Fixed announcement date of September 2, 2026
- Bank of Canada: Bank of Canada publishes 2026 schedule for policy interest rate announcements and other major publications
Information checked against the sources listed above on October 8, 2026. Educational information, not financial, tax or legal advice.
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