December 8, 2025
RED FM News Desk
Economists broadly expect the Bank of Canada to keep its benchmark interest rate unchanged this week, closing out a year marked by global trade tensions and persistent economic uncertainty.
The central bank’s policy rate is currently 2.25 per cent heading into Wednesday’s final rate announcement of 2025 — a full percentage point lower than where it began the year.
As of Friday afternoon, financial markets were assigning nearly a 93-per-cent probability that the bank will opt for a rate hold, according to LSEG Data & Analytics.
A run of stronger-than-expected labour market reports from Statistics Canada, along with an unexpected 2.6-per-cent annualized increase in real GDP during the third quarter, has reinforced expectations that policymakers will stay put.
“Pulling these strands together, there is now no doubt the bank will stand aside,” BMO chief economist Doug Porter wrote in a note to clients Friday.
The central bank has lowered its key rate by a quarter point four times this year. Cuts in January and March kicked off 2025, followed by a pause through the summer, and then two back-to-back reductions in September and October.
In its October announcement, officials suggested they were comfortable with the current stance of monetary policy unless future economic data diverged sharply from their forecasts.
With an unpredictable year drawing to a close, charting Canada’s economic path has proved anything but straightforward — and the Bank of Canada appears ready to end 2025 in a holding pattern.
Loading ...
