Bank of Canada Governor Stephen Poloz will probably keep the benchmark interest rate unchanged today as he weighs the risks posed by inflation that’s been below target for more than a year against concerns that lower borrowing costs could lead consumers to add to record debts.
Canada’s economic growth slowed to a 0.6 percent annualized pace in the third quarter as consumer spending gains were offset by falling business investment and the fastest export decline since the end of the last recession.
Bank of Canada policy makers kept their key interest rate unchanged today and added language about a potential increase for the first time since September, saying they will raise rates “eventually” as the economy recovers.
Canadian stocks fell, after reaching a five-month high, as technology companies dropped and investors weighed reports on domestic and U.S. jobs growth amid growing tensions between America and Russia over Syria.
The cost of living in Canada unexpectedly fell in August, and the 12-month inflation rate slowed on decelerating energy costs, which may ease pressure on the Bank of Canada to continue raising interest rates.
Canadian capital markets will attract investment in 2012 due to the country’s relative stability, Margaret Franklin, chief executive officer of Kinsale Private Wealth Inc., said at a Bloomberg forum in Toronto.
Canada’s inflation rate unexpectedly accelerated in May to the fastest since March 2003, sparking the biggest gain in the country’s currency this month as investors increased bets the central bank will raise interest rates.