Bank of Canada announces interest rate cut to 2.75 per cent amid trade war concerns

The Bank of Canada has lowered its key interest rate by 25 basis points to 2.75 per cent – meaning Canadian households can expect to pay slightly less on variable rate mortgages and other borrowing costs for the time being.

The rate cut comes amid an ongoing trade war between Canada and the U.S., which has caused uncertainty in both countries’ financial markets.

Despite the looming threat of tariffs, the Bank of Canada says the Canadian economy entered 2025 in a solid position.

However, tensions over the trade war are expected to slow the pace of consumer spending, investing and hiring.

The Bank says inflation remains close to the 2 per cent target, but is prepared for pressures to rise in the wake of more tariffs.

The next scheduled date for announcing the overnight target rate is April 16.

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