Bank of Canada cuts key interest rate to 4.25%
The quarter-percentage-point cut was widely expected by economists and brings the central bank’s benchmark interest rate to 4.25 per cent.
On Wednesday, the Bank of Canada implemented its third consecutive interest rate cut as inflation continues to ease and attention shifts to concerns about economic growth.
The widely anticipated quarter-percentage-point reduction lowers the central bank’s benchmark interest rate to 4.25 percent.
This policy rate, which significantly influences borrowing costs across Canada, including mortgage and loan rates, has dropped by 75 basis points since the easing cycle began in June.
Annual inflation has steadily declined throughout 2024, most recently registering at 2.5 percent in July.
In recent months, economists and market analysts have observed a change in the Bank of Canada's focus. The central bank has been downplaying the challenge of achieving its mandated two percent inflation target, instead emphasizing the weakening labour market.
Most economists who spoke to Global News before Wednesday's announcement indicated that with increasing confidence that inflation is trending downward, there was little justification for maintaining such high interest rates.
