The Bank of Canada has done a 180 shift and held the bank rate at 1% (3% prime rate). Earlier this year is was a forgone conclusion that the BoC was going to start to raise rates this fall.
Several factors have forced the banks hand, such as the global economic outlook has deteriorated in recent weeks. The European debt crisis has intensified, along with the US downgrade of credit from AAA to AA, plus the US recession was deeper and has been shallower than previously reported. Recent data also concludes that the US growth recovery will be weaker than anticipated.
Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. In light of slowing global economic momentum and heightened financial uncertainty
The next BoC update is October 25, 2011.
Click here to read the entire article from the Bank of Canada.
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