Second big-rate-cut aims to spur business investment

The Bank of Canada slashed its overnight rate by 0.5% for the second time in a row.

This morning’s announcement brings the rate to 3.25%.

“Governing Council has reduced the policy rate substantially since June. Going forward, we will be evaluating the need for further reductions in the policy rate one decision at a time,” the Bank’s statement said, adding it is committed to holding inflation to its current rate of about 2%.

The Conference Board of Canada said its latest survey on business confidence showed 35.1% of business leaders cited higher interest rates as a factor affecting expenditures. It’s the first time since 2022 that fewer than 40% of businesses cited interest rates as a concern when making capital investments.

The Bank of Canada’s next scheduled rate announcement is Jan. 29, 2025.