Economists say BoC could cut interest rates again in July if inflation keeps cooling

Tuesday's report from Statistics Canada will offer the first inflation reading after the Bank of Canada delivered a quarter-percentage-point rate cut on June 5, bringing its benchmark rate to 4.75 per cent. Economists say the new data could set the stage for another cut in July.

The Bank of Canada's decision to cut rates marked a major turning point in the central bank's fight against inflation, which reached a peak of 8.1 per cent in mid-2022. "It will open the door for potentially the Bank Canada deciding to go back-to-back on rate cuts," Orlando said. "While they recognized the risk that progress could stall — as it had in the United States — there was consensus that with four consecutive months of easing in core inflation and indicators suggesting continued downward momentum, there had been sufficient progress to warrant a first cut in the policy rate," the summary said.

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