2013-01-24 - Rate hikes delayed as Bank of Canada cuts forecast

2013-01-24 - Rate hikes delayed as Bank of Canada cuts forecast

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Rate hikes delayed as Bank of Canada cuts forecast By Kevin Carmichael January 24, 2013 – The Globe and Mail The Bank of Canada is setting aside worries over a housing bust to double down on a broader concern: the country’s sputtering economy. Canada’s central bank surprised Bay Street and Wall Street Wednesday by dropping from its latest policy statement any hint that it would raise interest rates to deter Canadians from bidding up housing prices and adding to record levels of household debt. Instead, policy makers, led by Governor Mark Carney, said higher interest rates now are “less imminent” because Canada’s economy is expanding markedly slower than the central bank had forecast a few months ago. Exports and business investment aren’t growing fast enough to make up for a fast-cooling housing market, the bank said. The Bank of Canada, which sets rates with a goal to keep inflation advancing at a pace of about 2 per cent a year, said the economy likely won’t grow fast enough to cause prices to exceed that target until the second half of 2014, later than previously thought. With housing prices in retreat, and household credit growth slowing to a pace roughly in line with
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