The Globe and Mail reports in its Thursday, March 19, edition that the Bank of Canada kept its benchmark interest rate at 2.25 per cent Wednesday. The Globe's Mark Rendell writes that this decision follows a significant increase in energy prices due to the Iran war, which has disrupted the Strait of Hormuz, affecting global oil supplies. Benchmark oil prices have surged over 50 per cent in a month, with Canadian gasoline prices rising nearly 40 cents a litre. Governor Tiff Macklem said the BOC will consider the inflation spike from rising gasoline prices but is prepared to act if the energy shock impacts broader prices and raises inflation expectations for households and businesses. "If energy prices remain high and show signs of persistence, we may raise the policy interest rate to combat inflation," Mr. Macklem said after the rate announcement. "Conversely, if energy prices decline and the economy weakens, we could lower our policy rate for support. There's considerable uncertainty, and we'll monitor developments closely." Before the outbreak of the war, the BOC widely expected to keep rates steady through 2026. Financial markets are now pricing in the possibility of a hike in the back half of the year.