The Bank of Canada is widely expected to cut its key interest rate by 25 basis points to 2.5 per cent on Wednesday morning.

The central bank has kept the rate at 2.75 per cent since March, citing high uncertainty around U.S. President Donald Trump’s tariffs and ongoing inflation pressures.

But now, with unemployment on the rise and economic activity contracting, many economists believe the bank will choose to add support to the economy.

Inflation data released Tuesday also showed that prices rose by less than expected, further supporting the case for a cut.

“Canada’s central bank will have an easy decision to make,” said Royce Mendes, head of macro strategy at Desjardins, in a note to clients on Tuesday.

“With the labour market deteriorating, economic weakness in trade-exposed sect

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