The Bank of Canada has cut its interest rate by 25 basis points to 2.5 per cent.

This marks the first time that the central bank has changed the rate following three consecutive settings.

Bank of Canada Governor Tiff Macklem says three developments have shifted the balance of risk since July.

“First, Canada’s labour market has softened further,” says Macklem. “Second, although there are still some mixed signals, on balance recent data suggests upward pressures on underlying inflation have diminished, and third, with the removal of most retaliatory tariffs by Canada there’s less upside risk to future inflation.”

The move comes a day after the Consumer Price Index rose to 1.9 per cent from 1.7 nationally, but dropped to 1.3 per cent in Newfoundland and Labrador.