Looks like Canadians may be enjoying the record low interest rates for some time. Since June the Bank of Canada has been trying to normalize the banks overnight rate, they attempted to do this by increasing the overnight rate by .75% this past summer to 1% (3% bank prime rate). The Bank of Canada would like to see the rate increase to around 3.5% (5.5% bank prime rate) which is ideal for a balanced economy, economists believe.
This is now unlikely for some time due to the recent developments of a slower recovery in the US and in Canada, as well as the re-emergence of the European debt crisis.
Look for bank of Canada governor, Mark Carney to hold off hiking rates until at least July 2011. This is good news for most Canadians borrowing money and especially if you have a variable rate mortgage.
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