The Bank of Canada maintains overnight rate at 1%, inflation is at 1.2%, ergo, interest rates should remain low for the foreseeable future. Several analysts view the odds of an increase in borrowing costs in the near future is zero.
“While slow growth and global economic risks nearly slayed the notion that the Bank of Canada would be hiking rates any time soon, today’s inflation report put a nail in the coffin,” said CIBC.
Earlier in the week, TD Bank projected the third quarter could see growth drop to as low as one per cent, from 1.8 in the first two quarters of the year, and half the Bank of Canada’s forecast.
Bank of Montreal economist Robert Kavcic noted the core inflation rate was the coolest pace in just over a year and down from a recent high of 2.3 per cent set in February.