On Wednesday, the Bank of Canada lowered its benchmark interest rate for the third time in a row, bringing it down to 4.25%. This move, widely anticipated by economists, comes as inflationary pressures continue to ease across the country.

Analysts had forecasted a 25 basis point reduction, and the central bank hinted at the possibility of additional rate cuts later this year. The Bank highlighted that inflation dropped to 2.5% in July, with core inflation metrics also trending lower. Additionally, preliminary data indicates that economic activity was subdued in June and July, with employment growth showing signs of stagnation.

“If inflation continues to moderate as projected in our July outlook, it is likely that we will proceed with further reductions in the policy rate,” stated Governor Tiff Macklem.

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