Canada’s GDP stalls, clouding Bank of Canada’s December call
The Bank raised its overnight rate to 2.50% on October 28, framing the move as risk management against energy-driven inflation. Friday’s GDP data offers a pointed counterpoint.
Benjamin Reitzes of BMO says the Bank of Canada’s first rate hike in more than three years may not be its last, with future decisions likely hinging on economic growth, inflation trends, and incoming data over the months ahead. https://t.co/lcW0HncB9d
— Canadian Mortgage Professional Magazine (@CMPmagazine) October 29, 2026
Retail and manufacturing hold the line
Retail trade gained 1.2% in August after contracting in July. Manufacturing rose 0.3%, its fifth increase in seven months, despite continued exposure to US tariffs. Construction added 0.2%.
Against those gains, utilities fell 0.4%, led by a 0.5% decline in electric power generation.
Public administration retreated as 2026 census preparation wound down. Mining, quarrying, and oil and gas extraction were flat.
What the shortfall means for December
Money markets are currently pricing in a hold at the Bank of Canada’s December 10 meeting, followed by a further 25-basis-point increase to 2.75% in January. Friday’s figures complicate that picture.
