Bank of Canada cuts key interest rate to 4.5%

The Bank of Canada's key interest rate fell by 25 basis points on Wednesday, a move that will immediately be felt by Canadians with variable rates of debt.

The Bank of Canada cut its benchmark interest rate by a quarter of a percentage point on Wednesday, the second straight reduction in the central bank’s easing cycle.

The Bank of Canada’s policy rate, which broadly informs the cost of borrowing across the country, now stands at 4.5 per cent.

The move was widely expected by economists as inflation continues to cool and the Canadian economy shows signs of weakness.

The Bank of Canada’s interest rate easing cycle kicked off in June with a 25-basis-point cut.

Since the central bank began raising its policy rate in March 2022, elevated interest rates have ratcheted up borrowing costs for many Canadians, businesses and governments, discouraging spending in a bid to tame decades-high levels of inflation.

The second rate cut in as many months will be felt immediately by Canadians carrying debt with variable rates of interest, including some mortgages and home equity lines of credit.

More to come…