Bank of Canada holds key rate at 1%

January 17th, 2012

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

The Bank of Canada announced:

The global economy has deteriorated and uncertainty has increased. The recession in Europe is now expected to be deeper and longer than expected.
Very favourable financing conditions are expected to buttress consumer spending and housing activities.
The economy is expected to return to full capacity by the third quarter of 2013.

They are not expecting to increase their prime lending rate at this time.

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 March 8th, 2012.

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