Bank of Canada keeps key interest rate target at 0.25%, early data shows economy plunged

The central bank says the downturn tied to COVID-19 will be the worst on record

The Bank of Canada is keeping its key interest rate target on hold at 0.25 per cent, saying this morning that it is effectively as low as it can go to combat the economic impacts of COVID-19.

The central bank says the downturn tied to COVID-19 will be the worst on record. Preliminary data from Statistics Canada today showed economic activity collapsed in March as it dropped a record nine per cent.

The pandemic has forced companies to close and workers to stay at home as much as possible in a massive public health effort to slow the spread of COVID-19, leading to steep and sudden drops in business activity and consumer spending.

The central bank’s economic outlook also released this morning says the speed of the anticipated rebound rests on the shoulders of containment efforts to bring the pandemic under control.

If conditions improve quickly, the economic shock is likely to be “abrupt and deep but relatively short-lived” and followed by a strong rebound for most, but not all, sectors of the economy.

A more severe scenario would likely see a “significant number” of businesses closing for good and longer spells of unemployment as workers look for new jobs.

READ MORE: More older Canadians die as COVID-19 toll passes 800; economy could shrink 6.2%

READ MORE: March job losses just ‘a tiny snapshot’ of full impact of COVID-19

The Canadian Press


Like us on Facebook and follow us on Twitter.

Coronaviruseconomy

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A second wave of COVID-19 is probable, if history tells us anything

B.C.’s top doctor says that what health officials have learned this round will guide response in future

Council talks trash: New garbage bylaw in the works

Draft bylaw to be voted on at Monday, May 25 council meeting

UPDATE: Police oversight agency investigating after shots fired Saturday night in Chilliwack neighbourhood

RCMP reported a ‘distraught male’ fired at police officers on Christina Drive – IIO is on scene Sunday

Prospera Credit Union, Westminster Savings lay off over 100 staff following historic merge

2020 merger was largest credit-union merger in Canadian history

‘Service beyond the classroom’: Gerry Palmer wins UFV award

Palmer has been involved with UFV for more than 30 years, starting as an instructor

LIVE: Procession to honour Snowbirds Capt. Jennifer Casey comes to Halifax

Snowbirds service member died in a crash in Kamloops one week ago

RCMP facing ‘systemic sustainability challenges’ due to provincial policing role

Provinces, territories and municipalities pay anywhere from 70 to 90 per cent of the cost of the RCMP’s services

‘Not a joke’: Promoter wants to rocket-launch man the length of White Rock pier

Brooke Colby says he’s building an eight-foot rocket in his backyard

RCMP confirm man dead in Chilliwack shooting incident

The Independent Investigations Office of B.C. is investigating the RCMP’s role in the death

B.C. employers worry about safety, cash flow, second wave in COVID-19 restart

A survey found 75 per cent of businesses worry about attracting customers

Ex-BC Greens leader Andrew Weaver says province came close to early election

Disagreement centred on the LNG Canada project in northern B.C.

Canada’s NHL teams offer options to season-ticket holders

Canadian teams are offering refunds, but also are pushing a number of incentives to let them keep the money

Boy, 2, left with ‘soft tissue injuries’ after being hit by car in Squamish intersection

Boy was release from hospital, police continue to investigate

B.C. premier says lessons to learn from past racism during response to pandemic

B.C. formally apologized in the legislature chamber in 2008 for its role in the Komagata Maru tragedy

Most Read