Tiff Macklem, the Governor of the Bank of Canada, has indicated a potential acceleration in the pace of interest rate reductions, as reported by the Financial Times on Sunday.

In an interview with the publication, Macklem expressed concerns regarding the Canadian labor market and the impact that declining oil prices could have on the economy.

He stated, “As you approach the [inflation] target, your risk management considerations evolve.

You start to focus more on the potential downside risks, particularly as the labor market suggests some vulnerabilities.” Following a year of maintaining its key policy rate at 5%, the highest level in over twenty years, the Bank of Canada has implemented three consecutive quarter-point cuts since June, reducing the rate by 75 basis points to 4.25% earlier this month.

In July, Canada experienced an overall inflation rate that dropped to a 40-month low of 2.5%. Macklem noted last week that while the bank anticipates stronger growth, there are still downside risks to this expected improvement.

He remarked during a speech to the Canada-UK Chamber of Commerce in London that “Trade disruptions could lead to greater fluctuations in inflation away from the 2% target.”