BoC expected to lower interest rates again, with odds leaning toward larger cut

Financial markets and forecasters are betting on another jumbo interest rate cut from the Bank of Canada this week.

Statistics Canada’s latest job report tilted expectations in favour of a larger cut.

The Friday report revealed the unemployment rate jumped to 6.8% in November, up from 6.5% a month earlier, as more people looked for work.

A half-percentage point interest rate reduction would bring the central bank’s key interest rate to 3.25%.

The Bank of Canada reduced its key interest rate by half a percentage point in October in response to inflation returning to target, but signalled the size of the next rate decision would be data-dependent.

Canada’s inflation rate was 2% in October.

Nojoud Al Mallees, The Canadian Press

Nojoud Al Mallees is a reporter with The Canadian Press, a national news agency headquartered in Toronto and founded in 1917.