The Bank of Canada has decreased the prime lending rate by 0.25%
Here are the highlights:
The Canadian Economy
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Economic growth “likely” picked up to about 1.5% through the first half of 2024, however, with robust population growth of about 3%, the economy’s potential output is still growing faster than GDP, which means excess supply has increased
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There are signs of slack in the labour market with the unemployment rate rising to 6.4% and with employment continuing to grow more slowly than the labour force and job seekers taking longer to find work
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Wage growth is showing some signs of moderating, but remains elevated
On Inflation
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Inflation measured by the Consumer Price Index moderated to 2.7% in June after increasing in May
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Broad inflationary pressures are easing, and the Bank’s preferred measures of core inflation have been below 3% for several months and the breadth of price increases across components of the CPI is now near its historical norm
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Shelter price inflation remains high, driven by rent and mortgage interest costs, and is still the biggest contributor to total inflation
