The Bank of Canada has held its target for the overnight rate at 2.25%, which impacts Canadian mortgage rates, among other things. The decision marks the seventh consecutive scheduled announcement in which the policy rate has not changed. The Bank pointed to a broadening economic recovery while flagging inflation risks tied to energy prices and to new tariffs between Canada and the United States. The next scheduled interest rate announcement is October 28, 2026.
GDP was up by 3.3% following weakness in the first quarter, the Bank noted in its announcement, with growth visible in consumption, and “some rebound in housing activity.” CPI inflation hovered around 3%, largely driven by higher gasoline prices tied to the ongoing Middle East conflict. Excluding gasoline, inflation stood at 2.2%, with core inflation measures remaining close to 2%.
The Bank held the policy rate steady as the economy and inflation continue to evolve broadly in line with its July forecast, while noting increased risks to inflation and continued uncertainty surrounding economic growth.
Target for the overnight rate
2.25%
Unchanged on September 2, 2026. Seventh consecutive hold.
Source: Bank of Canada interest rate announcement, September 2, 2026
Key Takeaways
The Bank of Canada held its target for the overnight rate at 2.25% on September 2, 2026, marking its seventh consecutive rate announcement without a change.
Canada’s economy strengthened in the second quarter, with GDP increasing by 3.3% following weak growth in the first quarter.
Housing activity showed signs of a rebound after several weak quarters.
CPI inflation has been around 3%, largely due to higher gasoline prices. Excluding gasoline, inflation was 2.2% in July, while measures of core inflation remained close to 2%.
The Bank is watching inflation risks associated with high energy prices, U.S. tariffs and Canadian counter-tariffs, while also assessing whether Canada’s economic recovery can be sustained.
The next Bank of Canada interest rate announcement is scheduled for October 28, 2026.
Bank of Canada’s 2026 Policy Interest Rate Announcement Schedule
The Bank of Canada announces its decision on the overnight rate target eight times a year, typically on a Wednesday. The schedule for 2026 is as follows:
Wednesday, January 28
Wednesday, March 18
Wednesday, April 29
Wednesday, June 10
Wednesday, July 15
Wednesday, September 2
Wednesday, October 28
Wednesday, December 9
Read the full interest rate announcement below:
The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%.
The continuing conflict in the Middle East is keeping energy prices high. As well, new US tariffs and Canadian counter-measures have been announced following the breakdown of trade talks between Canada and the United States. Both situations remain fluid.
In the United States, economic growth continues to be solid, driven by consumer spending and AI-related investment. Growth in the euro area was stronger than expected in the second quarter, while China’s economy slowed. Overall, the global economy has shown resilience in the face of geopolitical headwinds, with growth broadly consistent with the July Monetary Policy Report (MPR) projection. With still-high oil prices and elevated margins for refined energy products, inflation in most countries remains high.
Financial conditions have tightened since July. Long-term bond yields have moved up globally, including in Canada. The Canadian dollar has appreciated slightly on US-dollar weakness.
As expected, Canadian economic activity strengthened in the second quarter, with GDP up by 3.3%, following very weak growth in the first quarter. While some of the recent strength reflected temporary factors, the pick-up in activity was broad-based. Consumption showed solid gains. Following several weak quarters, there was some rebound in housing activity. Exports and business investment were up sharply. Labour market conditions have improved in recent months, with the unemployment rate edging down to 6.4% in July. Still, demand for labour remains subdued and indicators point to continued excess supply in the economy.
Overall, recent data reaffirm Governing Council’s view of a broadening recovery in Canada’s economy. However, uncertainty is high and new US tariffs and threats of further action pose risks to the sustainability of the recovery.
CPI inflation has been hovering around 3% in recent months, mainly because of persistently higher gasoline prices. So far, there has been little evidence of higher energy prices spreading to other components of inflation: excluding gasoline, inflation was 2.2% and measures of core inflation remained close to 2% in July. However, with the Middle East conflict still ongoing and little progress reopening the Strait of Hormuz, upside risks to the Bank’s inflation forecast have increased. The longer that high oil prices and elevated refinery margins persist, the greater the risk of spillover to the prices of other goods and services. New US tariffs and Canadian counter-tariffs will also raise costs for some businesses and could feed into consumer prices over time.
With the economy and inflation evolving broadly as forecast in the July MPR, Governing Council agreed to leave the policy rate unchanged. However, the upside risks to inflation have increased, while new tariffs make growth prospects more uncertain. Governing Council will assess the sustainability of the economic rebound and the outlook for inflation, and is prepared to adjust monetary policy as needed. The Bank remains committed to maintaining Canadians’ confidence in price stability through this period of global upheaval.
FAQs
What is the Bank of Canada interest rate today?
As of September 2, 2026, the Bank of Canada’s target for the overnight rate is 2.25%. The Bank Rate is 2.5%, and the deposit rate is 2.20%.
Did the Bank of Canada raise interest rates in September 2026?
No. The Bank of Canada held its policy interest rate at 2.25% on September 2, 2026. This was the seventh consecutive scheduled interest rate announcement in which the overnight rate remained at 2.25%.
When is the next Bank of Canada interest rate announcement?
The next Bank of Canada interest rate announcement is scheduled for October 28, 2026. The Bank will also release its next Monetary Policy Report on that date.
Why did the Bank of Canada hold interest rates?
The Bank held its policy rate because economic growth and inflation have evolved broadly in line with its July forecast. However, it noted increased upside risks to inflation from high energy prices and tariffs, as well as uncertainty about whether Canada’s economic rebound will continue.
How does the Bank of Canada interest rate affect mortgage rates?
The Bank of Canada’s policy rate can influence borrowing costs throughout the economy. Changes in the overnight rate generally have a more direct impact on variable mortgage rates, while fixed mortgage rates are influenced more heavily by bond yields and broader financial market conditions.
Does a Bank of Canada rate hold mean mortgage rates will stay the same?
Not necessarily. A policy rate hold means the Bank of Canada has not changed its overnight rate, but mortgage rates can still move. Fixed mortgage rates can change as bond yields and financial market conditions change, while lenders can also adjust the rates they offer borrowers.
Will the Bank of Canada cut interest rates in 2026?
Future interest rate decisions will depend on economic conditions and the outlook for inflation. The Bank has said it will assess the sustainability of Canada’s economic rebound and inflation outlook and is prepared to adjust monetary policy as needed. Its remaining scheduled rate announcements in 2026 are October 28 and December 9.
What does the Bank of Canada rate hold mean for homebuyers?
A rate hold provides some short-term stability in the Bank of Canada’s policy rate, but it does not guarantee that all mortgage rates will remain unchanged. Homebuyers should consider the mortgage rate available to them, their down payment, monthly payment and overall affordability when determining their home-buying budget.
