The Bank of Canada says U.S. tariffs on Canadian goods and Canadian counter-tariffs set to come into effect next week will likely be seen in increased costs for consumers. The impact, however, may not be felt for some time.

The Bank of Canada is once again holding its key interest rate at 2.25 per cent.

Governor Tiff Macklem says most of the goods directly targeted in the escalating trade war are not included in the Consumer Price Index.

“They’re mostly on intermediate inputs. Not many of them will impact things that are in the CPI, so, what that means is the effect is less direct. It’s going to take more time to pass through.

“We will be refining our estimates when we update our forecast. We’ll have to put a number on it, but our assessment at this point is that the inflationary impact of those counter-tariffs is fairly modest.”

The CPI is a gauge of the cost of a number of key items affecting Canadian consumers. It includes the cost of food, shelter, clothing, transportation, and recreation.