Bank of Canada will announce the interest rate on December 6

The Bank of Canada's interest rate announcement this week is going to be quite important for Canadians. This will be the last announcement of the year. Economists believe that the central bank could end the year on December 6 keeping interest rates at 5 percent, the same level since July.

Governor Tiff McCallum has said interest rate hikes are likely if inflation doesn't ease, but recent economic and labor market data suggest further interest rate hikes are unlikely.

The Canadian economy shrank by 1.1 percent on an annualized basis in the third quarter of the year. The unemployment rate has increased to 5.8 percent. All of this means that the Canadian economy is moving at a slower pace, as the central bank expected. However, hourly wages are still higher than the central bank's expectations.

The Royal Bank of Canada believes that the first interest rate cut could happen in the third quarter of 2024.