The Bank of Canada cut its benchmark interest rate by a quarter point on Wednesday as the central bank worries less about inflation risks and more about a slowing economy.

The central bank’s policy rate now stands at 2.5 per cent, breaking a streak of three consecutive holds since March.

Governor Tiff Macklem said the risks have shifted since the bank’s last interest rate decision in July.

Cracks in the labour market and a sharp drop in exports are threatening growth, he said, while earlier signs of underlying inflation pressure are fading.

“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,” he told reporters after the rate decision Wednesday.

The Bank of Canada signalled i

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