Bank of Canada cuts key interest rate to 4.25%
Global News
The Bank of Canada is continuing to cut its benchmark interest rate, lowering the cost of borrowing as inflation increasingly looks to be under control.
The Bank of Canada delivered its third consecutive interest rate cut on Wednesday as inflation continues to cool and concerns shift to economic growth.
The quarter-percentage-point cut was widely expected by economists and brings the central bank’s benchmark interest rate to 4.25 per cent.
The policy rate, which widely sets the cost of borrowing across Canada and informs the rates many Canadians get on mortgages and other loans, has fallen 75 basis points since the easing cycle began in June.
Annual inflation has continued to cool through 2024, last coming in at 2.5 per cent in July.
Economists and market watchers have noted a tone shift from the Bank of Canada in recent months: downplaying concerns that it won’t hit its mandated two per cent target and instead focusing on deterioration in the labour market.
Most economists who spoke to Global News heading into Wednesday’s decision said that, with growing confidence inflation is heading lower, there was little reason for interest rates to remain at such restrictive levels.
