Interest rates: Bank of Canada announces drop [Video]

Canada’s central bank has cut its key rate for the fifth consecutive time – now sitting at 3.25 per cent – as the country’s economy grows at a slower rate than projected.

The 50-basis-point cut comes after Canada’s economy grew by one per cent in the third quarter of 2024, and the fourth quarter is looking weaker than projected, according to the Bank of Canada.

“Monetary policy no longer needs to be clearly in restrictive territory,” said Bank of Canada governor Tiff Macklem in a statement.

Macklem noted consumer spending and housing activity both picked up as a result of lower interest rates.

Another factor in cutting the interest rate was Canada’s unemployment rate rising to 6.8 per cent in November as the bank says the number of people looking for work has increased faster than the number of jobs.

“It has been especially hard for young people and newcomers …