Graham Ogden

B Comm and Realtor®

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The Bank of Canada is once again keeping its key policy rate unchanged, and surprisingly indicating that future rate hikes are less imminent than previously anticipated. The Bank's statement noted that in Canada "the slowdown in the second half of 2012 was more pronounced than the Bank had anticipated," that "caution about high debt levels has begun to restrain household spending," and that "core inflation has softened more than the Bank had expected."

 

The prime rate for most lenders should stay at 3%, exactly where it has been for 27 months.

 

The Bank's next rate decision is scheduled for March 6.

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Today’s Bank of Canada rate hold announcement marks almost four straight years that the key benchmark rate has remained unchanged, since September 8, 2010. Great news if you have a variable-rate mortgage or home equity line of credit; the prime rate stays at 3%.

 

The announcement noted that “the risks to the outlook for inflation remain roughly balanced, while the risks associated with household imbalances have not diminished.” With these considerations, the Bank is maintaining its monetary policy stimulus, and remains neutral with respect to the timing and direction of the next change.

 

The next rate-setting day is October 22nd.

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