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Interest rate remains unchanged

OTTAWA (NEWS1130) – The Bank of Canada left its key overnight interest rate unchanged at one per cent.  It says the influential US economy has grown at a slower pace than expected.

The central bank noted that as the Canadian economy continues to grow, it will have to move to raise rates to keep inflation in check.

“To the extent that the expansion continues and the current material excess supply in the economy is gradually absorbed, some of the considerable monetary policy stimulus currently in place will be withdrawn, consistent with achieving the two per cent inflation target,” the Bank of Canada said.

Economists had widely expected the bank to leave rates unchanged as Canadian economic growth slowed in the second quarter.

But the bank says it expects the economy to begin accelerating in the second half of the year.