Bank of Canada cuts but thinks it has done enough

With the Bank of Canada’s decision to cut widely anticipated, the key development today was the signal that it now thinks the policy rate is “at about the right level to keep inflation close to 2% while helping the economy through this period of structural adjustment”. That is a sure sign that it is set to keep interest rates unchanged in December, as we anticipate, although we still think the Bank will eventually be forced to cut interest rates by a further 50bp later next year.

We'll be discussing the latest Bank of Canada decision in an online Drop-In later today at 12:00ET/16:00GMT (Register here.)