Bank of Canada cuts interest rate to 2.75% as country faces ‘new crisis’ from tariffs

Published by: CBC

The Bank of Canada has cut its overnight lending rate by 25 basis points to 2.75 per cent, it announced on Wednesday, as an ongoing trade war with the U.S. begins to strain the Canadian economy.

Explaining the decision in his opening remarks, Bank of Canada governor Tiff Macklem said the economy started the year strong, with solid GDP growth and inflation within its two per cent target.

But tariff uncertainty caused by the on-again, off-again trade war between Canada and the U.S. has weighed on business spending and hiring, and shaken consumer confidence, he said. Manufacturing businesses in particular have lowered their sales outlooks.