The Bank of Canada is widely expected to cut its key interest rate by 25 basis points to 2.5 per cent on Wednesday morning.
The central bank has kept the rate at 2.75 per cent since March, citing high uncertainty around U.S. President Donald Trump’s tariffs and ongoing inflation pressures.
But now, with unemployment on the rise and economic activity contracting, many economists believe the bank will choose to add support to the economy.
Inflation data released Tuesday also showed that prices rose by less than expected, further supporting the case for a cut.
“Canada’s central bank will have an easy decision to make,” said Royce Mendes, head of macro strategy at Desjardins, in a note to clients on Tuesday.
“With the labour market deteriorating, economic weakness in trade-exposed sectors spreading, and inflation well-contained, a 25 basis point rate reduction seems like the obvious course of action.”
The Bank of Canada will make the announcement on its website at 9:45 a.m.
It will be followed by a press conference with bank governor Tiff Macklem and senior deputy governor Carolyn Rogers at 10:30 a.m.
This is a developing story.
