OTTAWA - The Bank of Canada delivered a supersized interest rate cut today, lowering its key policy rate by half a percentage point.
With annual price growth now around two per cent, the central bank says its job has shifted from lowering inflation to maintaining it around the inflation target.
Forecasters were widely expecting the larger interest rate cut after Statistics Canada reported the inflation rate fell to 1.6 per cent in September.
The Bank of Canada is forecasting inflation will remain around the two per cent target throughout its projection horizon, which extends to 2026.
It also forecasts that economic growth will pick back up in 2025 and 2026 as lower interest rates boost consumption and business investment.
Governor Tiff Macklem says the central bank expects to lower its key interest rate further, as long as the economy evolves in line with its forecast.