Bank of Canada Leads G7 in Interest Rate Cuts

Bank of Canada Leads G7 in Interest Rate Cuts, Signaling Potential Economic Stimulus

June 7, 2024

Global M&A Activity Rises Amid Anticipated Rate Reductions in Developed Markets

The Bank of Canada on Wednesday cut its policy interest rate from 5.0% to 4.75%. This makes Canada the first G7 nation to cut interest rates in the present economics cycle.

The process of cutting interest rates in developed markets started on 8 May this year, when the central bank of Sweden (not a G7 country) lowered its policy interest rate from 4.0% to 3.75%.

Importantly, the European Central Bank (ECB) is widely expected to cut its policy interest rate tomorrow from 4.0% for the first time in five years.

Naturally, interest rate reductions should act as a stimulus to economic activity. For example, house prices in Sweden moved up modestly in May following the interest rate cut. Similarly, German mortgage rates have already moderated in anticipation of a rate cut by the ECB.

According to data compiled by the London Stock Exchange Group and reported in the Financial Times on 31 May, global takeover activity so far this year has totalled USD1.3 trillion, up 23% from the same period in 2023 – admittedly the worst year in a decade.

While political issues pose risks in many developed markets, the prospect of gradual interest rate reductions ought to permit this recovery in M&A activity to continue. This is especially true in markets where public equity valuations are moderate, such as the UK.

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Agri-TechE turns 10!

Thank you to the Agri-TechE team for the lovely celebration of their 10th birthday yesterday. We at Citicourt & Co are so proud of all your achievements and look forward to continuing celebrating. We are looking forward to attending their REAP event on the 6th November

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