Mortgage Blog
Bank of Canada Rate Announcement - December 10, 2025
December 10, 2025 | Posted by: Crescent Mortgage Corp.
As was widely expected, the BoC held its key target interest rate unchanged today, as the overnight rate remains at 2.25%.
Most major economies around the globe continue to show resilience in the face of US trade protectionism, but uncertainty remains high.
Canada’s economy surprising grew by 2.6% in the third quarter, largely reflecting the current volatility in trade. The BoC expects domestic demand will grow in the fourth quarter of 2025 but an anticipated decline in net exports suggests GDP numbers will likely be weak. Economic growth is forecast to pick up in 2026, although continued uncertainty may continue to cause quarterly volatility.
Canada’s labour market has shown some positive signs as the unemployment rate declined to 6.5% in November. Having said that, employment in trade-sensitive sectors remain weak and national hiring intentions continue to be subdued.
inflation readings slowed to 2.2% in October, with a fall in gas prices and food prices rising at a slower pace. CPI inflation has remained close to the BoC’s 2% target for over a year; however measures of core inflation stubbornly remain in the 2.50%-3.00% range. Going forward, the BoC expects cost pressures to be offset somewhat by ongoing economic slack keeping CPI inflation close to the 2% target.
Assuming inflation and economic activity progress in line with the BoC’s latest projections, the current policy rate is believed to be at the right level to keep inflation close to 2% while providing assistance to the economy during this period of trade uncertainty. The BoC reiterated it remains “focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval.”
The next interest rate announcement is scheduled for January 28, 2026.