The Bank of Canada is set to announce its interest rate decision today, where it's widely expected to lower its key lending rate.
A quarter-point cut would bring the central bank's benchmark rate down to 2.5 per cent after three consecutive holds at 2.75 per cent.
The bank received a last-minute look at the latest inflation data when Statistics Canada reported its consumer price index for August yesterday.
The report showed consumer prices rose 1.9 per cent in August year-over-year, up from 1.7 per cent in July, though it was a tick below economists' expectations.
Most economists say they believe the Bank of Canada will still cut rates today despite the inflation increase because the economy has weakened in recent months under the weight of tariffs and the labour market has slowed.
However, RBC Economics says a rate hold is still on the table because the economy has shown signs of a rebound in the third quarter, core inflation remains sticky and fiscal stimulus in the upcoming federal budget could risk pushing inflation up in the months ahead.
