The Bank of Canada announced no rate hike at its policy meeting yesterday.
This move that comes after eight consecutive rate increases which began a year ago, when rates were at a far lower 0.25%.At the last rate meeting on 25 January, the Bank’s Governing Council stated that it expected to “hold the policy rate at its current level while it assesses the impact of the cumulative interest rate increases”.on progress in the Canadian economy, asThis was lower than what the Bank had previously projected.
Yet there has been some positive news as preliminary data compiled from Statistics Canada for January found that GDP had climbed by 0.3%. As China’s economy has rebounded in the first quarter of this year, alongside the continuing impact of the Ukraine conflict, there remain considerable risks to the global economy.It is unlikely that there will be many raised eyebrows amongst analysts over the Bank’s decision to keep interest rates unchanged.
It is a consequence of the Canadian economy having to adjust to more interest rate rises than other economies have had to withstand, after a cumulative 4.25% surge in interest rates over the course of eight Bank meetings.Annualized inflation has slowed down for the third successive month the Bank said.This will come as good news for Canadian consumers, as there were lower prices recorded for energy, durable goods, and services, although this was offset by hikes in food and shelter costs.
Overall, the Bank believes that Canadian inflation will fall to around the 3% mark in the middle of this year.
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