The Globe and Mail reports in its Thursday, Sept. 3, edition that The Bank of Canada kept its benchmark interest rate unchanged for the seventh time but warned that inflationary risks are rising amid a trade war with the United States that could hinder Canada's economic recovery. The Globe's Mark Rendell writes that as expected, the BOC's governing council kept the policy rate at 2.25 per cent. Governor Tiff Macklem adopted a hawkish tone after the rate announcement, prompting bond traders to boost their bets on an interest rate hike by year-end. Mr. Macklem said the BOC is navigating two major risks: the global energy price shock caused by the war in the Middle East, and the escalation in the Canada-U.S. trade war following the breakdown in negotiations last month. Of the two, Mr. Macklem appeared more concerned that high oil prices could feed through into other consumer prices and become generalized inflation in Canada. Mr. Macklem said: "There's been a breakdown in trade discussions with the U.S., and that certainly makes [Canada's economic] rebound more uncertain. ... Where we go on interest rates is really going to be guided by our inflation forecasts and our risks around that."