Bank of Canada Keeps Interest Rate Steady Due to Global Uncertainty

Apr 29, 2026, 13:50
CanadaFinance

Introduction

The Bank of Canada has decided to keep its main interest rate at 2.25 per cent. This decision comes as the bank reacts to economic instability caused by the conflict in Iran and U.S. trade policies.

Main Body

This is the fourth time in a row that the bank has kept rates stable since they were lowered in October 2025. The decision is based on a volatile global economy, specifically the blockade of the Strait of Hormuz and attacks on energy facilities. These events have caused Brent crude oil prices to rise to about US$109 per barrel, which has led to transportation problems and higher global inflation. In Canada, the inflation rate rose to 2.4 per cent in March from 1.8 per cent in February. This increase was mainly caused by higher fuel costs and extra charges added by food suppliers. For example, the price of fresh vegetables jumped by 7.8 per cent in March, compared to only 0.5 per cent the previous month. Governor Tiff Macklem emphasized that while long-term inflation expectations are still stable, the bank will act if oil prices start to affect other sectors of the economy. He asserted that if energy prices stay high and cause general inflation, the central bank might increase interest rates several times. However, the bank expects oil prices to drop to US$75 per barrel by mid-2027. Furthermore, the bank believes the overall impact on the Canadian economy will be small because higher export earnings will help balance the financial pressure on consumers and businesses. Consequently, the growth forecast for 2026 has been increased to 1.2 per cent from the previous estimate of 1.1 per cent.

Conclusion

The Bank of Canada will continue to watch energy-related inflation and geopolitical risks while keeping the current interest rate unchanged.

Learning

🚀 The 'Cause and Effect' Upgrade

At the A2 level, you likely use 'because' for everything. To reach B2, you need to show how one event leads to another using more sophisticated connectors. This article is a goldmine for this transition.

🛠 From A2 to B2: The Connector Shift

Look at how the text avoids repeating "because." Instead, it uses these B2 Power-Moves:

  • "Led to" →\rightarrow (Example: "...led to transportation problems")

    • A2 style: "Oil prices rose because it caused transportation problems." (Wrong logic)
    • B2 style: "High oil prices led to transportation problems." (Clear cause →\rightarrow effect).

  • "Due to" →\rightarrow (Example: "...Steady Due to Global Uncertainty")

    • The Trick: Use this at the start or end of a sentence to explain the reason for a situation. It is more formal than "because."

  • "Consequently" →\rightarrow (Example: "Consequently, the growth forecast... has been increased")

    • The Trick: This is a "heavyweight" word. Use it at the start of a new sentence to show the final result of everything you just mentioned.

💡 Pro-Tip: The 'If/Then' Logic

B2 students don't just describe what is happening; they describe what might happen. Notice the Governor's logic:

"If energy prices stay high... the central bank might increase interest rates."

The Formula: If [Present Simple] + [Will/Might/Can] + [Verb]

Try applying this to your own life:

  • A2: I want a promotion so I study English.
  • B2: If I improve my English, I might get a promotion at work.

🔑 Vocabulary Bridge: Precision Words

Stop using "big" or "changing." Use these precise terms from the text to sound more professional:

  • Volatile (Instead of "changing a lot/unstable")
  • Emphasized (Instead of "said strongly")
  • Steady (Instead of "staying the same")

Vocabulary Learning

volatile (adj.)
sudden and unpredictable / prone to rapid change變動不定的
Example:The volatile global economy made the Bank cautious.
blockade (n.)
an act of surrounding or cutting off a place to prevent movement封鎖
Example:The blockade of the Strait of Hormuz disrupted oil supplies.
strait (n.)
a narrow waterway connecting two larger bodies of water海峽
Example:The Strait of Hormuz is a key shipping route.
facilities (n.)
places or equipment for a particular purpose設施
Example:Attacks on energy facilities damaged the power grid.
inflation (n.)
the rate at which prices rise, causing money to lose value通貨膨脹
Example:Inflation has reached 2.4 percent in March.
fuel (n.)
energy source used to power vehicles or machinery燃料
Example:Higher fuel costs increased the price of goods.
charges (n.)
fees or payments for services費用
Example:Extra charges added by suppliers raised costs.
suppliers (n.)
companies that provide goods or services供應商
Example:Food suppliers increased their prices during the crisis.
vegetables (n.)
plants eaten as food, especially leaves or roots蔬菜
Example:The price of fresh vegetables jumped by 7.8 percent.
jumped (v.)
suddenly increased or rose飛升
Example:The stock price jumped after the announcement.
governor (n.)
a person who runs or manages an organization行政長官
Example:Governor Tiff Macklem explained the policy.
expectations (n.)
beliefs about what will happen in the future期望
Example:Inflation expectations remain stable.
sectors (n.)
distinct parts or divisions of an economy or society部門
Example:Energy prices affect many sectors of the economy.
central (adj.)
located in the middle or most important中央的
Example:The central bank sets interest rates.
might (modal verb)
expresses possibility or permission可能會
Example:The bank might raise rates again.
increase (v.)
to become larger or more in amount增加
Example:The government plans to increase subsidies.
forecast (n.)
prediction about future events or conditions預測
Example:The growth forecast for 2026 is 1.2 percent.
export (n.)
goods or services sold to another country出口
Example:Canada's export earnings help balance the economy.