Second consecutive interest rate cut expected by the Bank of Canada

The Bank of Canada is set to announce its interest rate decision this morning as economists widely expect a rate cut.

Forecasters say slowing inflation and a weak economy justify a second consecutive cut by the central bank.

After a historic run-up, the central bank lowered its policy rate for the first time in June, bringing it down from five per cent to 4.75 per cent.

Governor Tiff Macklem signalled at the time that if inflation continues to ease, it would be reasonable to expect more rate cuts.

Last week, Statistics Canada reported the annual inflation rate ticked back down to 2.7 per cent in June after flaring up again in May.

Weak economic conditions have also slowed activity in the job market, bringing the unemployment rate up to 6.4 per cent last month.

This report by The Canadian Press was first published July 24, 2024.

The Canadian Press