Bank of Canada delivers 1st interest rate cut since March

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Posted September 17, 2025 9:51 am

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'What an uptick in inflation means for the Bank of Canada’s next interest rate decision'

1:58 What an uptick in inflation means for the Bank of Canada’s next interest rate decision

The annual inflation rate ticked higher to 1.9 per cent in August, according to Statistics Canada. As Anne Gaviola explains, a slew of data suggests the Canadian economy could use some help and many analysts expect the smallest of interest rate cuts from Canada's central bank on Wednesday.

Borrowing costs are coming down for some Canadians after the Bank of Canada on Wednesday delivered its first interest rate cut since March, lowering its overnight benchmark by 25 basis points from 2.75 per cent to 2.5 per cent.

Commercial lenders, like private banks, base their rates off of the key policy rate set by the central bank.

'How do central banks decide interest rates?'

2:20 How do central banks decide interest rates?

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The Bank of Canada had previously held its overnight rate for the past three meetings, with Governor Tiff Macklem on multiple occasions referring to the “uncertainty” of the economic outlook requiring a more cautious approach to monetary policy — especially with the evolving trade war and tariff policies.

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Macklem is scheduled to deliver remarks and answer questions at a press conference starting at 10:45 a.m. EST.

– More to come

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