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Bank of Canada Cuts Rate Amid Economic Slowdown

10/25/2025

34 4 Full Breakdown

Summary

Story summary

The Bank of Canada will cut its overnight rate by 25 basis points to 2.25% on October 29.
Economists say this is the second consecutive rate cut after the economy contracted 1.6% in the second quarter, amid U.S. tariffs on steel, aluminum, and automobiles.
Unemployment remains high and firms are cautious about investments.
Inflation rose to 2.4% in September, and the central bank aims to stimulate momentum.

History

Historical Context

In December 2008, the Bank of Canada cut its overnight rate to 1.5% as the country officially entered a recession, following a 2.6% contraction in its economy. This downturn was largely influenced by the global financial crisis and the economic struggles of the U.S., which led to rising unemployment and cautious investments, prompting central banks to stimulate recovery through lower interest rates.

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Story summary

The Bank of Canada will cut its overnight rate by 25 basis points to 2.25% on October 29.
Economists say this is the second consecutive rate cut after the economy contracted 1.6% in the second quarter, amid U.S. tariffs on steel, aluminum, and automobiles.
Unemployment remains high and firms are cautious about investments.
Inflation rose to 2.4% in September, and the central bank aims to stimulate momentum.

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