The cost of borrowing money is going down. The Bank of Canada has lowered the central rate by half a percentage point, the fourth cut this year. The new rate is 3.75 per cent.
Inflation year over year has dropped to below the two per cent mark, a key influencer.
It means that the commercial banks will likely lower the interest rates they charge customers on loans for things like cars and houses.
Bank of Canada Governor Tiff Macklem says actions taken to slow inflation are working but says “we need to stick the landing.”
The concern now is ensuring that the economy is not negatively affected.
He says the number of workers in Canada is greater than the number of jobs available, and continued geopolitical activity creates economic uncertainty.
He says “sticking the landing” means the upward and downward forces on inflation needs to balance out. He says “with inflation back to 2 per cent we want to see growth strengthened. Today’s interest rate decision should contribute to a pick up in demand.”