The Bank of Canada held interest rates on April 12, keeping its key policy rate at 4.5%. Read the central bank\u0027s official statement here.
In Canada, demand is still exceeding supply and the labour market remains tight. Economic growth in the first quarter looks to be stronger than was projected in January, with a bounce in exports and solid consumption growth. While the bank’s Business Outlook Survey suggests acute labour shortages are starting to ease, wage growth is still elevated relative to productivity growth.
As more households renew their mortgages at higher rates and restrictive monetary policy works its way through the economy more broadly, consumption is expected to moderate this year. Softening foreign demand is expected to restrain exports and business investment. Overall, GDP growth is projected to be weak through the remainder of this year before strengthening gradually next year. This implies the economy will move into excess supply in the second half of this year.
CPI inflation eased to 5.2 per cent in February, and the bank’s preferred measures of core inflation were just under five per cent. The bank expects CPI inflation to fall quickly to around three per cent in the middle of this year and then decline more gradually to the two per cent target by the end of 2024. Recent data is reinforcing Governing Council’s confidence that inflation will continue to decline in the next few months.
In light of its outlook for growth and inflation, Governing Council decided to maintain the policy rate at 4.5 per cent. Quantitative tightening continues to complement this restrictive stance. Governing Council continues to assess whether monetary policy is sufficiently restrictive to relieve price pressures and remains prepared to raise the policy rate further if needed to return inflation to the two per cent target.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Economists, Bank of Canada say Canada 'not immune to spillovers' amid recent banking turmoilThe Bank of Montreal's chief economist Doug Porter says markets are 'incredibly good' at discovering areas of weakness, and that he 'wasn’t sure we’ve seen the end of this.'
Read more »
Interest rates watch: Bank of Canada expected to hold the line on rates Wednesday morningMost forecasters expect Governor Tiff Macklem expected to leave central bank’s key lending rate at 4.5 per cent.
Read more »
Bank of Canada between 'a rock and hard place' heading into rate decision: Strategist - BNN BloombergAhead of the Bank of Canada’s next interest rate decision, one chief market strategist said he expects the central bank to hold rates while acknowledging current risks in the economy.
Read more »
Posthaste: Why these economists think the Bank of Canada’s next move will be a cutThe Bank of Canada is widely expected to hold its interest rate at 4.5 per cent on April 12, but what happens next? Read what economists say
Read more »
Majority of economists expect Bank of Canada to keep key interest rate steady through 2023Markets still expect more than 50 basis points of cuts, pricing fuelled by fears last month over stresses in the U.S. and European banking sector
Read more »
Posthaste: Why these economists think the Bank of Canada’s next move will be a cutThe Bank of Canada is widely expected to hold its interest rate at 4.5 per cent on April 12, but what happens next? Read what economists say
Read more »