Canada's economy grew at an annualized rate of just 1% in the third quarter, less than what the Bank of Canada had predicted, prompting currency markets to boost bets for a jumbo rate cut next month.

"Living standards are falling, policy is still restrictive, and inflation is at target – there is no convincing argument in the data as to why the Bank of Canada shouldn’t keep going at a 50 basis point pace in December," said Kyle Chapman, FX market analyst at the London, U.K.-based Ballinger Group.

Canada's economy grew as expected at an annualized rate of 1% in the third quarter, according to data released on Friday, helped by household and government spending and partly offset by lower business investments and exports.

The Canadian economy grew at an annualized rate of one per cent in the third quarter, Statistics Canada said on Friday.