Bank of Canada cuts key rate to 4.25%, opens door to steeper cuts – National [Video]

The Bank of Canada lowered its key interest rate by 25 basis points on Wednesday and opened the door to bigger cuts if the economy slows more sharply in the months ahead.

The third consecutive rate cut was widely expected by economists and brings the central bank’s benchmark interest rate to 4.25 per cent.

The policy rate, which widely sets the cost of borrowing across Canada and informs the rates many Canadians get on mortgages and other loans, has fallen 75 basis points since the easing cycle began in June.

“If inflation continues to ease broadly in line with our July forecast, it is reasonable to expect further cuts in our policy rate,” Bank of Canada governor Tiff Macklem said in prepared remarks Wednesday.

“We will continue to assess the opposing forces on inflation, and take our monetary policy decisions one at a time.”

Asked Wednesday whether the central bank debated a steeper …