The Bank of Canada has held their trend-setting Bank Rate at 1.25% for the 11th consecutive policy meeting. Borrowing costs remain unchanged again as of January 17th and it is hoped that these favourable financing conditions should assist in economic growth and stability in Canada.
The Bank of Canada noted that economic growth in Canada had more momentum in the second half of 2011, but they are predicting that the pace going forward will slow a little. However, the attractive interest rates should help to ‘buttress consumer spending and housing activity’.
For 2012, the Bank is projecting growth of 2.0% in 2012 and 2.8%. The projected growth for 2012 is expected to be slower in the first half of the year and then accelerated in the second half of 2012.
As a result of the current economic fabric in Canada, a number of financial institutions have dropped their five-year lending rates to a record low of 2.99%. The Bank of Canada’s next scheduled rate announcement is on March 8th, 2012.
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