The Bank of Canada is once again holding its key interest rate at 2.75 per cent, officials announced Wednesday.

Governor Tiff Macklem said the decision comes as uncertainty surrounding U.S. tariffs on Canada remains high.

Macklem said that while tariffs are disrupting trade, Canada’s economy is showing some resilience so far.

“A number of surveys suggest consumer and business sentiment is still low, but has improved,” he told reporters.

“In the labour market, we are seeing job losses in the sectors that rely on U.S. trade, but employment has kept growing in other parts of the economy.”

Macklem said increases in U.S. tariff rates are less than were threatened, but are still outside what we have experienced historically post-war.

Tariff agreements between the U.S. and some countries have reduced the risk of a “severe and escalating global trade war,” he said, but also suggest the United States is not returning to open trade.

While the economy appears to have contracted in the second quarter as exports to the U.S. fell, Macklem expects growth will resume in the second half of this year under the current tariff scenario.

Macklem said while inflation continues to hover around the two per cent target, they have seen some additional pressures in underlying inflation, which they are watching closely.

“Given the unusual amount of uncertainty, we’re continuing to put more weight on the risks and we’re ready to respond to new information,” he added.

The central bank also chose to keep rates unchanged in April and June.