Bank of Canada cuts interest rates once more, trims growth prospects
Al Jazeera
Bank of Canada governor said growth needs to pick up so inflation doesn’t fall too much.
The Bank of Canada has trimmed its key policy rate by 25 basis points for the second month in a row, bringing it down to 4.5 percent, and said more cuts were likely if inflation continued to cool in line with forecasts.
The Bank announced the rate cut on Wednesday.
The bank had previously kept the rate at a two-decade high of 5 percent for almost a year in a bid to combat high inflation by suppressing economic growth.
“We are increasingly confident that the ingredients to bring inflation back to target are in place,” Governor Tiff Macklem told reporters. The bank reiterated that inflation should return sustainably to its 2 percent target in the second half of 2025.
The Bank trimmed its 2024 growth forecast to a lacklustre 1.2 percent from the 1.5 percent it predicted in April, in part because households are setting aside more money to pay debts and have less to spend on discretionary items.
