Mortgage Blog
Bank of Canada Rate Announcement - January 28, 2026
January 28, 2026 | Posted by: Crescent Mortgage Corp.
As expected, the BOC kept its key policy rate unchanged at 2.25%.
Uncertainty due to US trade restrictions continues to hamper growth in Canada. Despite a strong third quarter, GDP growth in the fourth quarter was likely stagnant. Exports continue to be impacted by US tariffs, while domestic demand is showing signs of acceleration. While employment numbers have risen in recently, the unemployment rate remains elevated at 6.8% and relatively few businesses are planning to hire more workers.
Modest economic growth is projected for the near term due to unpredictable US trade policies and slowing population growth. The BoC projects GDP growth of 1.1% in 2026 and 1.5% in 2027. The upcoming renegotiation of CUSMA will impact these numbers.
CPI inflation heated up in December to 2.4%, due in large part to effects linked to last winter’s GST/HST holiday. Ignoring the impact of changes in taxes, inflation has been slowing since September. The BoC preferred measures of core inflation have dropped from 3% in October to around 2.5% in December. Inflation for 2025 was 2.1% and monetary policy is focused on keeping inflation close to the 2% target while helping the economy through this period of structural adjustment.
The next interest rate announcement is scheduled for March 18, 2026.