September 16, 2025
RED FM News Desk
The Bank of Canada is set to announce its latest interest rate decision on Wednesday, and a growing number of economists are predicting a rate cut.
“We believe the Bank of Canada should — and will — lower interest rates next week,” said Andrew Grantham, executive director and senior economist at CIBC. “Recent data hasn’t shown significant inflation risks, giving the Bank space to respond to signs of economic slowdown.”
The decision follows a series of economic indicators released over the summer that suggest both the broader economy and the labour market are losing momentum. These include a third consecutive monthly decline in GDP in June and inflation readings that now appear to be stabilizing within the central bank’s target range of 1% to 3%.
Andrew DiCapua, principal economist at the Canadian Chamber of Commerce, also expects a rate cut on Wednesday. “We could see more rate cuts this year if upcoming data doesn’t meet the Bank’s expectations,” he added.
The August Labour Force Survey showed unemployment rising above 7%, adding to the Bank’s concerns. Economists say the increase is partly due to businesses freezing hiring or cutting jobs amid rising costs from ongoing trade tensions and tariffs.
“The Bank had anticipated a GDP contraction in Q2, but the persistent rise in unemployment as we move through Q3 is more concerning,” Grantham said. “Higher joblessness typically reduces inflationary pressure over time, as consumer spending tends to weaken — potentially having a disinflationary effect.”
Loading ...
