A majority of economists expect the Bank of Canada to hold interest rates at their current levels when the central bank meets for the final time this year on Dec. 6.
According to data from Bloomberg Markets, most economists are calling for the Bank of Canada to hold its trendsetting overnight interest rate at its current level of 5%.
The central bank has chosen to hold its overnight rate at 5% at its two previous policy meetings held in October and September of this year.
In June, the Bank of Canada lifted its key interest rates by 25 basis points to 4.75% and did the same in July, bringing the rate to 5%.
However, recent data has shown that Canada’s economy appears to be slowing rapidly, alleviating the need for further interest rate increases.
On Dec. 1, Statistics Canada reported that Canada’s unemployment rate rose to 5.8% in November as higher interest rates slow the creation of new jobs. The unemployment rate has steadily increased since April of this year.
Additionally, Canada’s economy experienced a contraction in this year’s third quarter as gross domestic product (GDP) declined an annualized 1.1% between July and September.
A growing number of economists and futures traders are now pricing in a series of interest rate cuts in Canada during 2024 with the first one expected sometime in the spring.
The Bank of Canada’s first interest rate decision next year is scheduled for Jan. 24.
