10th Dec 08 homesgofast London-The Bank of Canada cut its benchmark lending rate by 75 basis points, or three quarters of a percent. The rate now stands at 1.5 percent, which is a 50 year low, and the bank is warning of a possible Canadian recession to go along with the worldwide economic downturn. The economy for the country has weakened more than expected, according to the bank.
“The outlook for the world economy has deteriorated significantly and the global recession will be broader and deeper than previously anticipated," the bank said in a statement. "While Canada's economy evolved largely as expected during the summer and autumn, it is now entering a recession as a result of the weakness in global economic activity. The recent declines in terms of trade, real income growth, and confidence are prompting more cautious behaviour by households and businesses."
The rate cuts come on top of recent gloomy financial news for Canada. Statistics Canada reported that job losses in November were just over 70,000, the largest one month drop in some 26 years.