Speculation about the Bank of Canada’s interest rate policy is creeping back into the news again. There are suggestions the benchmark rate will be on its way up by the end of this year and the Central Bank isn’t doing anything to quell those notions.
The latest global outlook from one of Canada’s “Big-5” banks points to on-going improvements in the U.S. economy as the driving force behind an increase of interest rates by the end of 2013. The outlook forecasts an increase as much as a half-a-percent (50 basis-points) provided the Canadian economy maintains the growth it showed at the end of 2012.
The Bank of Canada’s Senior Deputy Governor Tiff Macklem reaffirmed the central bank’s desire to see rates increase during an appearance less than a week ago. Macklem, who’s pegged as the best bet to replace exiting BoC governor Mark Carney, said the Central Bank’s low interest rate strategy “is reaching its limits and rising levels of household indebtedness have created vulnerability.”
The Bank of Canada’s next interest rate announcement is set for January 23rd. It is expected to hold the rate at 1%.
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