The Bank of Canada is referring to what it calls an extremely uncertain economic outlook due to the COVID-19 pandemic.

The central bank announced Wednesday morning that it is holding its key interest rate at a quarter of one per cent as expected.

It is predicting the economy to contract by 7.8 per cent this year but warns the numbers could be thrown off if there is a severe second wave of the novel coronavirus.

The central bank’s report pegs the annual inflation rate at 0.6 per cent this year, rising to 1.2 per cent next year and 1.7 per cent in 2022.

(C.P)