The Bank of Canada lowered its policy interest rate to 4.5 per cent Wednesday morning, a quarter-point cut.
It’s the second straight rate cut from the central bank.
The central bank cited weaker consumer spending, rising unemployment and easing inflationary pressures as factors in its decision.
“Household spending, including both consumer purchases and housing, has been weak. There are signs of slack in the labour market. The unemployment rate has risen to 6.4%, with employment continuing to grow more slowly than the labour force and job seekers taking longer to find work,” a release from the Bank of Canada explains. ” … The Bank’s preferred measures of core inflation have been below 3% for several months and the breadth of price increases across components of the CPI is now near its historical norm. Shelter price inflation remains high, driven by rent and mortgage interest costs, and is still the biggest contributor to total inflation. Inflation is also elevated in services that are closely affected by wages, such as restaurants and personal care.”
