Today the Bank of Canada announced that once again (for the 13th consecutive time over the past 19 months) that there will be no change to the overnight lending rate. This pleases variable rate mortgage holders since there are no alterations to the bank’s Prime lending rate and therefore no increase to their own mortgage rate and monthly mortgage payments.
The Canadian economy is exceeding the Bank’s expectations from January. The U.S. has contributed to the overall healthier economic picture in Canada since their own recovery has been more pronounced in recent months and their financial conditions have improved as well. An improvement in Canadian consumer confidence has unfortunately increased the level of household debt, which remains the greatest domestic risk in Canada. Net exports are forecasted to remain weak due to increased competition, a diminishing global demand and the strength of the Canadian dollar.
A full update of the Bank’s economic and inflationary outlook will be published tomorrow and the next meeting to discuss changes to the overnight lending rate is scheduled for June 5th, 2012.