In a widely expected decision, the Bank of Canada has announced its decision to keep the policy, overnight, rate unchanged at 1.5%. Below are the key takeaways from the official statement.
- The Bank expects CPI inflation to move back towards 2 per cent in early 2019, as the effects of past increases in gasoline prices dissipate.
- Wage growth remains moderate.
- Elevated trade tensions remain a key risk to the global outlook and are pulling some commodity prices lower.
- GDP growth is expected to slow temporarily in the third quarter, mainly because of further fluctuations in energy production and exports.
- While uncertainty about trade policies continues to weigh on businesses, the rotation of demand towards business investment and exports is proceeding.
- Recent data reinforce Governing Council’s assessment that higher interest rates will be warranted to achieve the inflation target.
- We will continue to take a gradual approach, guided by incoming data.
- The Bank is also monitoring closely the course of NAFTA negotiations and other trade policy developments, and their impact on the inflation outlook.
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