Bank of Canada slashes key interest rate to 2.5%

The Bank of Canada announced on Wednesday that it has lowered its key interest rate by 25 basis points to 2.5 per cent.

This is the first cut to interest rates by the central bank since March.

In his opening statement, governor Tiff Macklem said the decision was a “clear consensus” among members of the governing council.

“With a weaker economy and less upside risk to inflation, governing council judged that a reduction in the policy rate was appropriate to better balance the risks,” the bank wrote in a statement on Wednesday morning.

The bank had kept the policy rate at 2.75 per cent for three consecutive meetings, 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 contr