What to expect from the April Bank of Canada interest rate update

Canadians can expect the next Bank of Canada (BoC) interest rate announcement this month.

In March, Canada’s central bank held its key interest rate at 2.25 per cent. The Bank of Canada has maintained this rate since October 2025, but it said things could change depending on how the war between the United States and Iran unfolds.

“The war in the Middle East has increased volatility in global energy prices and financial markets, and heightened the risks to the global economy,” the Governing Council stated in the March announcement. “The breadth and duration of the conflict, and hence its economic impacts, are highly uncertain.”

The Crown corporation attributed this volatility to the spike in global oil and natural gas amid the conflict, which it says will boost global inflation in the near-term. In addition to disruptions to fuel supply, transportation bottlenecks due to the closure of the Strait of Hormuz could impact the supply of other commodities.

It’s been a little over a month since the last Bank of Canada rate update, and a lot has happened.

Here’s what you can expect from the next BoC announcement on Wednesday, April 29.

Will the Bank of Canada change the interest rate?

On Monday, Statistics Canada released the Consumer Price Index numbers for March. Canada’s inflation rate increased by 2.4 per cent year over year last month, up from an increase of 1.8 per cent in February.

“Driving faster price growth in headline inflation were higher prices for energy, especially gasoline, due to the conflict in the Middle East,” stated StatCan.

NerdWallet Canada mortgage expert Clay Jarvis says that March’s inflation numbers likely signify another rate hold for April.

“If you peel energy prices from CPI, inflation in March was actually lower than in February,” he explained.

“Some might argue that the Bank should lower the overnight rate to give the economy, particularly the job market, some juice. But no one knows what impact the Iran war will have on inflation, so preventive medicine like that could have seriously negative side effects.”

Ratehub mortgage expert Penelope Graham said the Bank of Canada rate hold is essentially an indication that it’s “on standby” as it monitors the impacts of the global conflict and economic growth and inflation at home.

“Overall, policymakers have indicated that it’s ‘too early’ to respond to this new geopolitical pressure, but the possibility of rate hikes is very much back on the table, along with the risk of Canadian stagflation, as jobs and GDP data continue to sag,” she explained in a response to March’s announcement.

Ashish Dewan, investment strategist at Vanguard Canada, said the BoC will likely need a more prolonged deterioration in labour conditions before cutting again.

He noted that the Bank of Canada’s monetary policy is “ill-suited to address” ongoing trade tensions and geopolitical challenges, which limits the possibility of rate cuts as a response.

“If the Middle East conflict were to become protracted and persist for more than two quarters, the Bank of Canada would likely become more inclined to hike rates, as headline inflation could rise by roughly 75 basis points and core inflation by about 30 basis points,” Dewan said in response to the March rate update. “We expect the Bank of Canada to hold its policy rate at 2.25 per cent throughout the year in our base case.”

Here’s how you can stay up-to-date with the Bank of Canada interest rate updates in 2026.