The Bank of Canada lowered its key interest rate by 25 basis points to 2.5\u00a0per cent on Wednesday, marking its first cut since March.<\/p>\n
The job\u00a0market has softened, core inflation\u00a0\u2014 which excludes gas\u00a0\u2014 has eased, and the federal government’s removal of retaliatory tariffs against the U.S. has\u00a0reduced some “upside risk” to future inflation, governor Tiff Macklem noted in his opening remarks during a news\u00a0conference in Ottawa.<\/p>\n
“Considerable uncertainty remains. But with a weaker economy and less upside risk to inflation, Governing Council judged that a reduction in the policy rate was appropriate to better balance the risks going forward,” he\u00a0said.<\/p>\n
The Canadian economy has seen a number of developments since July that influenced the bank’s unanimous decision to cut rates, Macklem\u00a0said.<\/p>\n
A snapshot of the Canadian economy<\/p>\n
GDP declined in the second quarter, as the central bank\u00a0expected, and exports to the U.S. fell after businesses initially front-loaded on\u00a0inventory in response to U.S. tariffs. Businesses have pulled back on their investments, the governor\u00a0noted.<\/p>\n
Tariffs continue to have a “profound effect” on key Canadian industries such as auto, steel and aluminum \u2014 as do additional tariffs on copper and lumber and Chinese tariffs on canola, pork and seafood, he said.<\/p>\n
Meanwhile, the Canadian economy has lost more than 100,000 jobs in the last two months\u00a0and the unemployment rate has climbed to 7.1 per cent.<\/p>\n
In addition to\u00a0significant job losses in tariff-exposed sectors, employers in other industries are pulling back on hiring as uncertainty plagues the Canadian economy, Macklem explained.<\/p>\n
Consumer spending was stronger than expected in the second quarter, but that could change as job market weakness weighs on Canadian households, he added.<\/p>\n","protected":false},"excerpt":{"rendered":"The Bank of Canada lowered its key interest rate by 25 basis points to 2.5\u00a0per cent on Wednesday,…\n","protected":false},"author":2,"featured_media":150596,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46],"class_list":["post-150595","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-ca","tag-canada","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/150595","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=150595"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/150595\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/150596"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=150595"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=150595"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=150595"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}