Bank of Canada Holds Rates

Today was another big day for the Bank of Canada. I got this e-mail from ChantelChapmanwith The Integré Mortgage Partners Team. I can always count on her to make sure myself and my clients are up-to-date on the most current mortgage news.  If you are looking to purchase, refinance, or get advice on your current mortgage don’t hesitate to call Chantel!

“Bank of Canada met this morning and announced that they are keeping the overnight interest rate steady.  It’s not a big surprise that Bank of Canada is holding interest rates as they indicated in earlier meetings that they may be holding at this rate into early 2013 given the economic crisis in European markets. The prime rate remains at 3%.  Please find below and article written byGordonIsfeldfrom the Financial Post this morning.

If you currently have a variable rate at prime -.25% or lower, we recommend staying in the variable rate. If your rate is higher than prime -.25%, please contact me.”

ChantelChapman, AMP
Mortgage Partner
778-397-6167 cell    604-677-6167 fax 
102-901 WEST 3RD STREET,NORTH VANCOUVER,BCV7P 3P9


Bank of Canada Holds Rates by Gordon Isfeld

Financial Post, December 6, 2011

The Bank of Canada kept its overnight interest rate at 1% on Tuesday, predicting that Europe’s recession would be “more pronounced” than previously thought but giving no suggestion of an impending rate cut.

“Conditions in global financial markets have deteriorated as the sovereign debt crisis in Europe has deepened,” the central bank said in announcing it was keeping its key interest rate on hold for the “medium term.”

“Additional measures will be required to contain the European crisis. The recession in Europe in now expected to be more pronounced than the bank anticipated in October.”

Last month, Bank of Canada governor Carney told a Montreal business audience that the central bank sets monetary policy “in the real world, where shocks are a fact of life.”

Those shocks have continued as European leaders struggle to tame the region’s debt crisis, which began in smaller economies – such as Greece, Spain and Ireland – and now threatens to spread to stalwarts Germany and France, unthinkable only a few months ago.

On Monday, the leaders of Germany and France agreed to a plan to tighten fiscal policy among the 17 nations that share the euro currency. Those proposals will be presented to the European Union at a summit Friday in Brussels.

On the same day, however, rating agency Standard & Poor’s threatened to downgrade domestic ratings across most of the eurozone.

That was met with a blunt response from German Economy Minister Philipp Roesler, who said his country “will not be influenced by . . . the short-lived verdict of one rating agency.”

Meanwhile in Canada, gross domestic product grew by 0.9% between July and September, or 3.5% on annualize rate. The third-quarter jump followed a 0.5% contraction in the second quarter.

The central bank says growth in the second half of 2011 “is slightly stronger than the bank projected in October.”

“Household expenditures have more momentum than had been expected and business investment remains solid.”

While third-quarter GDP was better than expected, Canada’s employment picture remains cloudy. The country lost 18,600 jobs in November and the unemployment rate edged up to 7.4% from 7.3%.

The Bank of Canada’s key interest rate has been at 1% since September 2010, with policy-makers attempting to avoid another recession by encouraging spending by businesses and consumers.

“With the target interest rate near historic lows and the financial system functioning well, there is considerable monetary stimulus in Canada,” the bank said in its Tuesday statement.

Canada’s annual rate of inflation eased to 2.9% in October from 3.2% the previous month. Still, that marked the 11th straight month that the overall consumer price index was above 2%, the Bank of Canada’s target within a range of one to 3%.

The core inflation rate, which factors out volatile items including some food and energy products, now stands at 2.1%, down from 2.2% in September.

“Although total CPI inflation has been slightly higher than projected, the bank continues to expect the inflation rate to decline as a result of reduced pressures from food and energy prices and ongoing excess supply in the economy,” the Bank of Canada said Tuesday.

However, the bank said it would “continue to monitor carefully economic and financial developments in the Canadian and global economies, together with the evolution of risks, and set monetary policy consistent with achieving the 2% inflation target over the medium term.”

The Bank of Canada’s next interest rate decision will be announced Jan. 17, followed the next day by an updated outlook for the economy and inflation.

Pleae don't hesitate to contact me any time for all of your Real Estate needs.

Warm Regards,

Morgan DuVernet
Century 21 In Town Realty
604-209-1230
www.MorganDuVernet.ca
www.MorganDuVernetRealEstate.com
www.KitsLiving.com

 

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