As anticipated by many, the Bank of Canada lowered its benchmark interest rate by 0.25%, bringing it to 4.25%. The prime lending rate is now 6.45%.
This is the Bank of Canada’s third consecutive rate cut following a previous cut in July. In today’s announcement, the Bank said, “With continued easing in broad inflationary pressures, Governing Council decided to reduce the policy interest rate by a further 25 basis points. Excess supply in the economy continues to put downward pressure on inflation, while price increases in shelter and some other services are holding inflation up. Governing Council is carefully assessing these opposing forces on inflation. Monetary policy decisions will be guided by incoming information and our assessment of their implications for the inflation outlook. The Bank remains resolute in its commitment to restoring price stability for Canadians.”
The Bank of Canada addressing shelter costs is definitely a move in the right direction. This change should help relieve some financial stress off middle-class families, homeowners, renters, and those looking to buy a home. Rates are still higher than they were pre-pandemic, but it’s good to see the Bank of Canada recognizing the affordability challenges Canadians are dealing with. We’re hopeful for more steps to support both current and future homeowners.
The next rate announcement is scheduled for Wednesday, October 23, 2024, stay tuned.
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