Bank of Canada cuts interest rates to 2.25 per cent

The Bank of Canada has cut interest rates by 25 basis points, bringing the key rate to 2.25 per cent.

This is the second consecutive decrease since September. According to the Bank, the decision hinged on the further impacts of tariffs.

In a statement today, the Bank described the global economy as “resilient” in the face of tariffs, but “the impact is becoming more evident.”

Canada’s economy contracted by 1.6 in Q2, reflecting a drop in exports and weak business investment in the face of this uncertainty. GDP growth is also expected to be low in the second half of the year.

The Bank says it will continue to monitor the situation. If inflation and economic activity remain within their projected range, Governing Council says it will consider the current policy rate as “the right level” to keep the economy stable.

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