Latest news with #Bank of Canada
Yahoo
5 days ago
- Business
- Yahoo
'Cost of living Canada' tops list of household fears ahead of Bank of Canada rate decision
Even as Canadians kick back and enjoy exploring their own country or relax into summer while soaking up sunshine rays, many are still struggling with the higher cost of living. As the Bank of Canada prepares for its next interest rate decision on July 30, 2025, a recent survey from shows that nearly two-thirds of respondents (63.9%) confess that the cost of living is their top economic concern — dwarfing worries about borrowing costs, jobs or debt levels. The findings highlight a growing divide between current economic indicators and how Canadians actually feel about their day-to-day finances. Don't Miss Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich — and 'anyone' can do it The Canadian economy is showing signs of softening amid Trump's tariffs — protect your wallet with these 5 essential money moves (most of which you can complete in just minutes) I'm almost 50 and don't have enough retirement savings. What should I do? Don't panic. Here are 6 solid ways you can catch up Cost of living dominates the economic anxiety The findings of the survey offer a clear signal of what Canadians are feeling most acutely — a feeling that could influence how the central bank frames its next interest rate policy decision. While past rate hikes were aimed at taming inflation, households are now more preoccupied with ongoing affordability challenges than with the cost of borrowing itself. Based on survey data is appears Canadians continue to feel the pressure of elevated grocery prices, rent, and transportation costs. There may be hope from some that the nation's central bank will consider consumer sentiment as it decides whether or not to cut, hold, or raise the overnight benchmark rate. Will the Bank of Canada cut, hold, or hike? The Bank of Canada held its policy interest rate at 4.75% at its last meeting in June 2025, after cutting from 5% earlier that month. Some economists anticipate another small cut this time around, as inflation continues to cool modestly and job growth softens. Yet, others expect the Bank to pause and wait for more data before making additional moves. No matter which way the BoC decides to go, the decision appears to come with risks. Cutting too soon could weaken the Canadian dollar and reignite inflation — especially if the U.S. Federal Reserve maintains its higher rates for longer. Holding steady might keep mortgage and loan costs high, worsening household affordability. Finally, a hike in rates (although very unlikely) could potentially worsen consumer sentiment and tip some households into financial distress. Read more: Here are — and very quickly regret. How many are hurting you? Canadians' top concern is broader than interest rates While the Bank of Canada's rate decision will impact living costs, most survey respondents did not consider higher intererest rates as their primary concern. Turns out fewer than 1 in 9 Canadians selected 'high interest rates' as their top concern — despite more than two years of rapid hikes. This suggests that while interest rates are affecting Canadians, they are seen more as a side effect of deeper economic problems like inflation, housing, and everyday affordability. This is most likely due to the perceptoin that while high rates have slowed inflation, the damage is done — people are still paying more for food, gas and rent. This also emphasis the gap the continues to emerge between macroeconomic indicators and household realities. What's next All eyes are now on the Bank of Canada's July 30 announcement. While core inflation is gradually trending downward, and the job market is beginning to show signs of strain, the Bank of Canada's decision will ultimately depend on whether it believes consumer pain — especially related to cost of living — outweighs the risk of reigniting inflation. Whatever the move, the signal from Canadians is clear: affordability — not just inflation — is now the top issue. Survey methodology The survey was conducted through email between July 16 to 21, 2025. Approximately 6,220 email newsletter subscribers, over the age of 18, were surveyed with 183 responses. The estimated margin of error is +/- 6%, 18 times out of 20. About is a leading financial platform committed to providing individuals with comprehensive financial education and resources. As part of Wise Publishing, is a trusted source of reliable financial news, expert advice, comparison tools and practical tips. Canadians get insight on a variety of personal financial topics, including investing, retirement planning, real estate, insurance, debt management and business finance. What To Read Next Are you rich enough to join the top 1%? Here's the net worth you need to rank among Canada's wealthiest — plus a few strategies to build that first-class portfolio Ramit Sethi says you should hit these 9 'money milestones' before 40 if you want to be rich — how many have you crossed off the list? Pet owners, here's how you can get up to 90% cashback on expensive emergency veterinary bills — and you can even get a free quote in 30 seconds This man from Toronto feels broke making $73,000 a year — his wife recently left him and he has an 18-month-old child. Here's what Dave Ramsey told him This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
21-07-2025
- Business
- Globe and Mail
Businesses downbeat but less worried about worst-case tariff scenario, Bank of Canada surveys find
U.S. President Donald Trump's erratic trade policy has put a chill on Canadian businesses and consumers, but fewer are expecting a worst-case tariff scenario, according to a pair of surveys published by the Bank of Canada on Monday. The quarterly pulse checks, conducted in late April and May, captured the sour mood across Canada as Mr. Trump rolled out waves of tariffs through the spring and early summer. Canadian companies said they're curtailing investment and hiring, and eating higher tariff-related costs because of weak consumer demand. Consumers said they are worried about their jobs and are delaying big purchases. Tariffs are likely here to stay. What now, for Canada? At the same time, the surveys found a sense of relief that U.S. tariffs have not bitten as hard as many feared earlier in the year when Mr. Trump was threatening across-the-board tariffs, without the exemptions that were later introduced. 'Fewer businesses are considering extremely negative scenarios in their planning,' the Bank of Canada said. This hint of optimism reinforces expectations that the central bank will hold interest rates steady for the third-consecutive time when it meets next week. After a string of better-than-expected economic data in recent weeks, financial markets are pricing a nearly 90-per-cent chance that the bank will keep its policy rate at 2.75 per cent next Wednesday, according to LSEG Data & Analytics. What happens to monetary policy going forward depends a lot on how the trade war unfolds – both the outcome of Ottawa's trade negotiations with Washington, and how tariffs end up feeding through Canada's economy and influencing business pricing decisions and consumer behaviour. Given the rapidly changing trade environment, the two Bank of Canada surveys are already dated. Since May, Mr. Trump has doubled tariffs on steel and aluminum to 50 per cent and threatened to increase tariffs on goods that don't meet free-trade-agreement rules to 35 per cent from 25 per cent. Last week, Prime Minister Mark Carney acknowledged that U.S. tariffs probably aren't going to zero, even if Ottawa can secure some reprieve. That said, the surveys highlight several dynamics that could inform where interest rates go from here. So far, U.S. tariffs and Canadian countertariffs haven't had a major impact on Consumer Price Index inflation, which came in at 1.9 per cent in June – below the central bank's 2-per-cent target. The business survey suggested that companies are having trouble raising prices. Around half of the respondents said they're facing cost pressures related to tariffs and changes to their supply chains. However, 'competitive pressures and the current weakness in demand are limiting firms' ability to pass on these costs to customers,' the Bank of Canada said. 'As a result, many businesses expect their selling prices to increase over the coming year at a similar rate as they did over the past year. Because customers are sensitive to price increases, many firms are absorbing a portion of these increased costs, compressing their profit margins in an effort to preserve market share,' the bank said. Quebec Premier says any new trade deal with the U.S. needs to have specific time frame Having spiked dramatically in the first quarter, business and consumer expectations about future inflation remain elevated, although they did level off somewhat in the second quarter. 'Worries about tariff passthrough and inflation expectations were the reasons that the Bank of Canada held rates back in June, but those look less concerning in these surveys,' Royce Mendes, head of macro strategy at Desjardins, wrote in a note to clients. 'While central bankers probably won't ease monetary policy next week, there is ample scope for them to resume their cutting cycle later in the year should the economy continue to stagnate,' he wrote. Both Bank of Canada surveys had notes of pessimism and optimism. The share of companies planning for a recession declined to 28 per cent from 32 per cent in the first quarter, and the number of companies that expected higher tariff-related costs dropped to one-third from two-thirds. That said, more companies reported that leading indicators, such as order books and sales inquiries, have deteriorated, and hiring and investment intentions remain weak. The consumer survey found that concerns about job security have eased somewhat since the first quarter. But fears of job losses remain elevated, and consumers are becoming increasingly cautious about spending on non-discretionary items. Bradley Saunders, North America economist at Capital Economics, said in a note to clients that the surveys may appear overly downbeat given when they were conducted. 'Bleak sales and spending intentions captured by the Bank of Canada's second-quarter business and consumer surveys are consistent with a sharp downturn in GDP growth,' he said. 'However, the surveys were carried out at a time of peak tariff uncertainty. Since then, the timelier monthly business and consumer surveys generally suggest that sentiment has improved as tariff escalation threats have receded.'
Bloomberg
21-07-2025
- Business
- Bloomberg
‘I Won't Be Going': Canadians Explain Their US Boycott to the Central Bank
Canadians say they're ramping up their boycott of US travel and products in response to US President Donald Trump's tariffs, and the country's central bank is taking notice. For the first time ever in its quarterly survey of consumers, the Bank of Canada asked people about their plans for US trips. About 55% of Canadians said they're avoiding or spending less on vacations to US destinations, and roughly a third of said they plan to spend more on domestic travel.
Bloomberg
21-07-2025
- Business
- Bloomberg
Firms See Canada Escaping Worst Tariff Outcomes, Survey Shows
By and Randy Thanthong-Knight Save Uncertainty about US President Donald Trump's trade policy is curbing Canadian business investment and consumer spending, even though firms see the economy avoiding a bad recession, central bank surveys show. In the first quarterly reports since the Bank of Canada paused rate cuts in April, businesses and consumers appear to have adopted policymakers' cautious stance amid rapidly changing tariff and trade policy. Firms slowed hiring and investment, while Canadians tightened their belts due to fear of job losses.
Bloomberg
21-07-2025
- Business
- Bloomberg
Economists See Slimmer Chance of More Rate Cuts in Canada This Year
Expectations for further interest rate cuts this year from the Bank of Canada are slowly evaporating. Economists at two of Canada's largest lenders, Bank of Nova Scotia and Royal Bank of Canada, now say Governor Tiff Macklem and his officials will keep their benchmark rate at 2.75% through the end of 2025.
