Bank of Canada Oct 2025 – 0.25% CUT

/in /by

Here are the highlights:

  • Interest Rates down:
    • Bank of Canada lowered interest rates 0.25%.  New Prime Rate of 4.45%
    • This is the second consecutive cut 
    • The total number rate cuts this cycle remains at 2.75%.
    • The Bank feels rates are at an appropriate level
  • Economic Indicators:
    • GDP declined in Q2 1.6%
    • Forecasts for growth are 1.2% in 2025, 1.1% in 2026 & 1.6% in 2027
    • ​Real GDP per capita is lower now than in 2019(!).
  • Job Market:
    • Surprising job gains in Sept after falling sharply through the summer
    • Unemployment remains at 7.1%
  • Inflation:
    • CPI rises 0.5% to 2.4%
    • Median & trim inflation hotter than expected with an avg of 3.15%
    • ​Inflation ​pressures remain elevated
  • Forecasts:
    • ​Likely the last cut of 2025
  • Next Bank of Canada Meeting:
    • Scheduled for Dec 10th, 2025


The Bank of Canada cut rates today 0.25%, lowering prime to 4.45%.

That’s the good news.  The bad is, after Canada’s economy shrunk by 1.6% in the 2nd quarter, the Bank expects further weakening in the 2nd half of this year.  The Bank’s forecast for growth is an anemic 1.2% this year, 1.1% next & 1.6% in 2027.  Canada has had NO economic growth in 6 years.  Think about that. 


That comes as the parliamentary budget officer recently warned our government spending & debt is “unsustainable … alarming .. stupifying & shocking.” 

​This is a politically independent officer selected on the advice of our Prime Minister:


Imagine your family expenses growing each year so to cover those expenses you borrow from your line of credit telling yourself, “Once I get that raise, I’ll pay this down,” but that raise doesn’t come, so more & more of your pay cheque goes towards interest.  You get further trapped in that cycle & it gets harder & harder to claw your way out without drastic changes.

The Bank of Canada feels the current rate level is now at about the right level & the next & final rate announcement of the year is Dec 10th.  Until then, thanks for watching & have a great week.