Inderraj Saini

By TD Economics Key Takeaways: The Bank of Canada is set to make another rate announcement on June 4 TD Economics predicts that the central bank will deliver two more rate cuts this year, though the exact timing is up in the air When the central bank cuts its rate, it can become cheaper for Canadians to borrow money If youre a homeowner with a mortgage or someone looking to buy, youll likely be wondering what the Bank of Canada (BoC) is going to do this year when it comes to interest rates. Thats because whenever the BoC cuts its lending rate, it can become cheaper for Canadians to borrow money. And when the BoC raises its lending rate, it can become more expensive. According to TD Economics, the central bank might offer some rate relief in the coming months. The ongoing softness in the labour market should open the door for the BoC to cut interest rates two more times this year, despite the recent uptick in inflation. Amid trade tensions with the U.S., Andrew Hencic, Director and Senior Economist at TD Economics, said two cuts of 25 basis points each could help support the economy without putting too much more pressure on inflation. That means the current rate of 2.75% could come down to 2.25% by the end of the year. We think that enough slack has accumulated in the economy that theres space for the central bank to cut its lending rate a little bit more without too much inflationary pressure coming through, Hencic said. https://stories.td.com/ca/en/article/bank-of-canada-interest-rate-prediction-june-2025

Canadian households spent an average of $76,750 on goods and services in 2023, up 14.3% from 2021. Amid the recovery from the COVID-19 pandemic, this was the largest two-year increase observed since the series began in 2010. The rise in household spending was partly attributed to consumer inflation, as the Consumer Price Index increased by 10.9% from 2021 to 2023. Shelter accounted for 32.1% of total consumption of goods and services in 2023, followed by transportation (15.8%) and food (15.7%), which remained the three largest spending categories. Household spending on food purchased from restaurants, recreation, and accommodation away from home rebounded and exceeded pre-pandemic levels In 2023, Canadian households spent an average of $12,046 on food, an increase of 16.9% from 2021. Average spending on food purchased from stores was $8,659, up 7.4% from 2021. Following a 21.1% decline from 2019 to 2021, average spending on food purchased from restaurants rose to $3,351 in 2023 as pandemic restrictions eased. Households spent an average of $5,231 on recreation in 2023, up 23.9% from 2021, following an 8.7% decrease from 2019 to 2021. The increase in 2023 was primarily driven by a rebound in spending on recreational services (+120.7%), such as movie theatres, live sporting and performing arts events, and package trips, which aligned with record high operating revenue in the spectator sports, event promoters, artists and related industries sector in 2023. Following a 44.9% decrease from 2019 to 2021, average spending on accommodation away from home, such as hotels and motels, increased to $910 in 2023, rising by 129.2% from 2021 and surpassing the pre-pandemic level of 2019. Homeowners spent more on mortgage payments and condo fees in 2023 In 2023, homeowners spent an average of $27,831 on shelter, up 17.4% from 2021. Homeowners without mortgages spent an average of $13,750 (+7.5%) on shelter, while those with mortgages spent an average of $38,718 (+16.9%). Mortgage payments ($21,342) accounted for more than half of this total and increased by 15.3% from 2021, reflecting in part the impacts of rising interest rates from 2022 to 2023. On average, homeowners with mortgageswho made up more than half of homeownersspent 37.2% of their total consumption on shelter, the highest proportion recorded since 2010. For homeowners, average spending on condo fees was $1,118 in 2023, up 52.9% from 2021, the largest two-year increase rate observed since 2010. Renters spent an average of $18,333 on shelter in 2023, up 20.2% from 2021. Of this total, $15,272 went to rent, up 16.9% from 2021. On average, rent payments accounted for approximately one-quarter of renters total consumption, a proportion that has remained relatively stable since 2010. https://www150.statcan.gc.ca/n1/daily-quotidien/250521/dq250521a-eng.htm