The Globe and Mail reports in its Monday, Aug. 31, edition that the Bank of Canada is likely to maintain its benchmark interest rate at 2.25 per cent this week amid a worsening trade war that threatens to raise consumer prices and impact economic growth. The Globe's Mark Rendell writes that with trade talks between Ottawa and Washington breaking down and escalating tariff threats, the chances of an interest-rate hike or cut have diminished further. C.D. Howe Institute's Jeremy Kronick says, "The only option for the bank is to wait and see." A BOC study of Canadian countertariffs imposed last year found that they raised the prices of targeted items by around 6 per cent and added 0.3 per cent to overall CPI inflation at the peak of the price shock. An escalation in the trade war could weigh on the Canadian economy more broadly if exports contract, businesses hold off hiring and investing amid the uncertainty, and consumers get nervous. "If the tariffs stick, they will have more of a growth impact than a lift to inflation," says CIBC economist Avery Shenfeld. Because the new U.S. tariffs only hit about 5 per cent of Canadian exports, Bay Street economists aren't expecting them to have a large macroeconomic impact.