Thu. Feb 29th, 2024
What the Bank of Canada’s decision to press pause on interest rates means for the economy

The Bank of Canada decided Wednesday to hold its key interest rate steady at 4.5 per cent, but made it clear it’s still prepared to raise rates further depending on inflation.

The hold, which was widely expected by economists, comes after eight consecutive increases saw the key rate rise by 425 basis points since March of last year – one of the fastest rate tightening cycles in its history.

Canada’s annual inflation rate has cooled from highs of 8.1 per cent in mid-2022 to 5.9 per cent as of January, but the central bank says it's still too high.

As Anne Gaviola reports, the decision to press pause on interest rate hikes contrasts with what’s expected in the U.S. – and what happens across the border could impact prices in Canada.

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