Bank of Canada Holds Key interest rate

October 19, 2010

The Bank of Canada holds their key lending rate at 1%. Banks therefore are expected to keep their prime rates at 3%.

The Bank of Canada said that interest rate hikes are on hold until at least the spring and maybe as long as late 2011.

The reasoning behind their decision is the weaker than projected recovery in the US, a slower than expected recovery globally and domestic considerations are expected to slow consumption and housing activities in Canada. The inflation in Canada has been slightly below their projection.

With rates staying low, we are continuing to recommend that clients stay in their variable rate mortgages. The date of the Bank of Canada’s next announcement is scheduled for December 7th, 2010.

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