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The Bank of Canada (BOC) is expected to leave the key overnight interest rate on hold at 1.75% next month and year, as reflected by the latest Reuters poll of over 30 economists taken Nov. 19-26.

Key Findings:

“Forecasts on whether or not the central bank holds or cuts sitting on a knife’s edge through 2020.

That change in expectations was primarily driven by comments from BoC officials – Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins – who spoke last week at separate events about Canada’s monetary conditions being “about right” despite global trade tensions.

Every respondent in the poll expected rates to remain on hold at the conclusion of the BoC’s Dec. 4 meeting, in line with market expectations.  

When asked if the Canadian economy actually needs a rate cut before the end of next year, a slim majority of economists – 13 of 24 – said no. Just a month back, a similar set of economists were slightly inclined toward a cut.

Notably, four of the top five major Canadian banks expected the BoC to cut rates at least once by end-2020.

After growing by a stronger-than-expected annualized rate of 3.7% in the second quarter, Canadian economic growth likely slowed to 1.2% in the third quarter.”