Prime Rate Remains at 3%Prime Rate Remains at 3%
Bank-of-Canada-Benchmark-RateThe Bank of Canada left its key lending rate unchanged today, in keeping with widespread expectations.
This implies the prime rate will remain at 3%, where it’s held since September.
Here are highlights from the BoC’s statement this morning:
* “The global economic recovery is proceeding at a somewhat faster pace than the Bank had anticipated.”
* “Stretched household balance sheets are expected to restrain the pace of consumption growth and residential investment.”
* “…business investment will likely continue to rebound strongly.”
* “…the economy will return to full capacity by the end of 2012.”
The Bank also lifted its 2011 growth estimate from 2.3% to 2.4%.
The next BoC rate meeting is 42 days from now on March 1. The price of assets based on the overnight target rate suggests there’s just a 31% chance of a rate hike at this meeting.
The Bank’s Monetary Policy Update comes out tomorrow. This should give us a more detailed picture of the BoC’s expectations for inflation.
Source: MyMortgage newsletter