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

North Okanagan farmers’ markets excited to welcome artisans back amid COVID-19

Provincial health officer announced non-food items to return to markets this weekend

WorkSafe BC conducted 70 inspections in the Okanagan amid B.C.’s reopening plan

WorkSafe BC has conducted 100 inspections at restaurants across the province since May 19

COVID-19: Coldstream district office set to open

Safety measures in place to protect staff, public upon June 1 reopening

Armstrong council reopens meetings to public at theatre

New location will allow appropriate physical distancing amid COVID-19 pandemic

Promoting downtown Vernon businesses the focus for 2020: DVA

Downtown Vernon Association holds AGM, plans to support biz move through pandemic

Only four new COVID-19 cases, 228 active across B.C.

Health officials watching as activities ramp up

Parts of the TCT through Princeton will open to motorized vehicles Monday

Parts of the KVR trail through Princeton will open for motorized vehicles… Continue reading

Feds looking at ways to reunite families amid COVID-19 border restrictions with U.S.

Some families with members of dual-citizenship have become separated due to the pandemic

Condition in kids with possible COVID-19 link being studied in Canada

This month, the U.S. Centers for Disease Control and Prevention issued an alert to doctors about MIS-C

‘I knew what he wanted’: Kootenay man spends hours in tree as black bear patrols below

Francis Levasseur is no stranger to the outdoors, but a recent run-in with a bear caused quite a scare

COVID cancelled their wedding plans, so they married on a BC mountaintop

Ceremony was live streamed to friends and family around the world

Mother duck and babies rescued from Highway 97 in Lake Country

The mother and nine ducklings were taken to Duck Lake

Chef brings farm-to-table approach to new Shuswap restaurant

Darren Bezanson opening Bistro 1460 at Hilltop Inn

Trudeau acknowledges racial unrest in U.S.; ‘We also have work to do in Canada’

‘Anti-black racism, racism, is real; it’s in the United States, but it’s also in Canada,’ Trudeau says

Most Read