Bank of Canada Dec 2025 – NO CHANGE

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Here are the highlights:

  • Interest Rates down:
    • Bank of Canada has left interest rates unchanged.  Prime Rate stays at 4.45%
    • The total number rate cuts this cycle remains at 2.75%.
    • The Bank feels rates are at an appropriate level
  • Economic Indicators:
    • GDP  in Q3 came in 2.6% annualized (far above the 0.5% expected)
    • The jump is more related to how GDP is calculated than actual real growth
    • Household spending saw largest quarterly decline outside the pandemic in 2 decades
    • ​Business activity remains weak
  • Job Market:
    • Better than expected Nov job print, adding 53k jobs
    • This was the 3rd (unexpected) month of gains
    • Unemployment dropped to 6.9%
  • Inflation:
    • CPI dropped 0.2% to 2.2%
    • ​Inflation ​pressures remain ​contained
  • Forecasts:
    • ​Fixed rates: edging higher in 2026
    • Prime rate (variable): could see another drop if trade war persists
  • Next Bank of Canada Meeting:
    • Scheduled for Jan 28th, 2026

Good morning, 


No action from the Bank of Canada today as the economic data somewhat picked up to close out the year.  Unemployment dropped 0.2% to 6.9% & Q3 GDP came in at 2.6% annualized which surprised above the 0.5% expected.

Q2 saw the economy contract on an annualized basis by 1.8% so the latest quarter’s jump to 2.6% seems to be a big positive move but the higher number had everything to do with how GDP is calculated.  


Exports edged up while imports dropped sharply by 8.6%, which creates the impression of growth, more so than actual real strength.  Household spending saw the largest quarterly decline outside the pandemic in nearly 20 years. 

This could set quite a challenge for the Q4 number to come in strong.

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In terms of what to expect next year, there is still a lot of uncertainty & trade related volatility.  If layoffs continue & the trade war continues to throw more knuckleballs we could see the Bank of Canada take further action lowering rates but for now, the BofC sees the policy rate at about the right level to keep inflation close to the 2% target.

If you or any family members have a mortgage coming up for renewal in 2026, reach out to me today to line up a time to connect, get a game plan going & ensure you don’t miss out on any opportunities over the coming year.

That’s it for me!  Thanks & have a great Christmas season.