The Bank of Canada has lowered its benchmark interest rate to 2.25 per cent. This marks the second consecutive cut this year. The move comes as a response to a slowing economy and growing trade tensions with the United States.
Officials said the rate adjustment is aimed at helping businesses and consumers manage through weaker conditions while keeping inflation close to the two per cent target. The move brings total rate reductions to one full percentage point starting in January.
Governor Tiff Macklem said global trade pressures, including new American tariffs, have weighed on exports and business investment. Recent data show the economy contracting in the second quarter as steel and aluminum exports fell sharply.
The central bank expects inflation to remain near two per cent through 2026, though uncertainty around trade and fiscal policy could change that outlook. Policymakers indicated they are prepared to act again if the economy slows further.
The next interest rate decision is scheduled for early 2026.
