Tuesday, December 4, 2012
No change to prime lending rate- Bank of Canada
How many ways can you say "Bank of Canada stands pat on interest rates"? Nevermind - we're not complaining! Today the Bank of Canada announced - yet again - that it will maintain its overnight rate at 1%. This is good news for variable rate holders, and individuals who are trying to pay down debt. The reasons for the Bank's decisions are reasons we've heard before. From a global perspective, the United States is progressing at a gradual pace but being held back by the "fiscal cliff". Europe is in a recession, and China's growth seems to be stabilizing. Canada suffered a weak third quarter thanks primarily to the energy sector. Housing activity is beginning to decline, thanks in large part to the mortgage rule changes that occurred earlier this year. At the same time, the household debt burden is still growing. The Bank warns that, at some point soon, it will have to withdraw some of its monetary policy stimulus to keep inflation in check. It promises to do so gradually, however, and many experts predict it likely won't happen until the second half of 2013 at the earliest. The Bank's next rate announcement is scheduled for January 23, 2013.