Bank of Canada Keeps Interest Rates At 1 %

18 January 2012 - Which Way to Pay

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Bank of Canada Keeps Interest Rates At 1 %

Basing its decision on predicting that the situation in Europe will continually worsen the Bank of Canada has kept interest rates at 1 percent where it has been since 2010. Mark Carney, the central bank governor said, “Prolonged uncertainty about the global economic and financial environment will take some of the steam out of growth in business investment in Canada.” The BOC estimated that the Canadian economy grew by 2.4 % in 2011 and projects that will grow by 2 percent in 2012 and 2.8 percent in 2013.  Carney went on further to say that the economic weakness in the United States will ensure that Canada is unable to reach its growth potential until late 2013. Although America has managed to rebound from the recession the bank believe that US recovery will only gradually move forward.  This decision is bound to disappoint as the pace of growth in Canada will now be more modest than previously thought causing many to fear a bleak outlook with predicted low interest rates to follow.

David Madani, a Capital Economics economist has said, “As we move to the end of the second quarter it will become clear the Canadian economy is struggling with rising unemployment and sluggish exports.” Some have predicted that household debt to disposable income will continue to exceed its current high of 153%. The Bank of Canada’s attention is aimed at external risks, particularly on the situation in Europe and the increasing threat that it poses on Canada’s economy.

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Related Links:
• Bank Of Canada
For more information on interest rates visit the Bank of Canada website
• World Interest Rates
Use this page to keep up to date on all of the latest world interest rates.

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