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Canada’s inflation rate fell to 2.5% in July, down from 2.7% in June, marking the slowest increase since March 2021. This decline has sparked predictions that the Bank of Canada will continue cutting interest rates this year. The next interest rate announcement is scheduled for September 4th.
Most experts expect the Bank of Canada to reduce its key interest rate by a quarter-percentage point. However, RBC economist Claire Fan suggests that a weaker-than-expected GDP report later this month could lead to a larger half-percentage point cut.
The drop in inflation, reported by Statistics Canada, is seen as a positive sign for the economy. Lower interest rates could help ease the cost of borrowing for Canadians. As the country waits for the Bank of Canada’s decision, all eyes are on the upcoming economic data that could influence the central bank’s next move.