Bank of Canada Holds Interest Rate at 1%
The Bank of Canada has kept its trendsetting overnight interest rate at one per cent, but not because the economy is doing poorly. The bank says the economy is actually outperforming expectations, and now expects it will grow by 2.9 per cent this year. That’s half a percentage point more than the bank predicted in January.
The bank also says the economy should return to full capacity by the middle of 2012, about six months earlier than previously thought. However, it’s not all good news. The bank warns there are many potential trouble spots ahead for the economy, including the elevated price of oil and the strength of the loonie, which should restrain growth.