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

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

Vaseux Lake. Grant Harder photo.
Letter: Why can’t we have motorized boats on Vaseux Lake?

Avid fisherman with a disability would love to use his pontoon

This elevated boardwalk will be replaced at the Osoyoos Desert Centre. (courtesy of the Osoyoos Desert Centre)
Funding to replace Osoyoos Desert Centre’s elevated boardwalk is ‘dream come true’

The 1.5 km boardwalk and trail is enjoyed by over 10,000 visitors annually

Wills Hodgkinson, 10, and his mom Neeley Brimer get ready to battle round three of cancer. The community of Penticton has his back. (Submitted)
Community raises $21K to help Penticton boy battle third round of cancer

Okanoggin Barbers held the fundraiser on Saturday for 10-year-old Wills Hodgkinson

The Okanagan’s first virtual wedding fair will be held Saturday, March 27. {Paul Rodgers photo)
Okanagan to host virtual wedding fair

Okanagan wine country is No. 1 destination for weddings - online event set for March 27

A health worker holds a vial of AstraZeneca vaccine to be administered to members of the police at a COVID-19 vaccination center in Mainz, Germany, Thursday, Feb. 25, 2021. The federal state of Rhineland-Palatinate, start with the vaccination of police officers in internal police vaccination centers. (Andreas Arnold/dpa via AP)
B.C. officials to unveil new details of COVID vaccination plan Monday

Seniors and health-care workers who haven’t gotten their shot are next on the list

(Contributed)
Kelowna flight potentially exposed to COVID-19

Third case on a local flight this month, compared to 14 through January

Vernon Search and Rescue, with help from the Air Rescue One helicopter out of Wildcat Helicopters in Kelowna, and Central Okanagan Search and Rescue, were able to transport an injured snowmobiler to Vernon Regional Airport, where he was loaded into an ambulance and taken to Vernon Jubilee Hospital with a serious, painful back injury. (Facebook photo)
Okanagan helicopter rescue teams called to retrieve injured sledder at Greystokes

Vernon and Central Okanagan Search and Rescue help load injured man into waiting helicopter

An investigation is underway after a man was shot and killed by Tofino RCMP in Opitsaht. (Black Press Media file photo)
Man shot and killed by RCMP near Tofino, police watchdog investigating

Investigation underway by Independent Investigations Office of British Columbia.

B.C. Supreme Court in Vancouver on Tuesday December 11, 2018. THE CANADIAN PRESS/Darryl Dyck
B.C.’s compromise on in-person worship at three churches called ‘absolutely unacceptable’

Would allow outdoor services of 25 or less by Langley, Abbotsford and Chilliwack churches

Jasmine and Gwen Donaldson are part of the CAT team working to reduce stigma for marginalized groups in Campbell River. Photo by Marc Kitteringham, Campbell River Mirror
Jasmine’s story: Stigma can be the hardest hurdle for those overcoming addiction

Recovering B.C. addict says welcome, connection and community key for rebuilding after drug habit

Chase RCMP held two men involved in drunken disturbances overnight in their detachment’s cells on Feb. 6. (File Photo)
Chase RCMP hold two men involved in drunken disturbances overnight

The two separate incidents took place less than an hour apart.

Kamloops Fire Rescue battled a landfill fire which belched toxic smoke into the air on Feb. 27. (City of Kamloops Photo)
Fire at Kamloops landfill sends thick black smoke into the air

Firefighters made slow progress on the fire throughout the morning.

Most Read