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BoC to Leave Interest Rate at 1%

The Bank of Canada monetary policy report released suggests no end for the bottom basement dwelling interest rates this year. The key lending rate will remain at 1% in next month’s announcement. There was, however, some indication that BoC will move next year to start increasing the interest rate to coincide with expected increases in the Canadian economy.

In my opinion that my be premature. Although we can predict an increase in our economy, which most signs point to positive territory, it doesn’t lend enough credence to international issues with the likes of PIGS. If the Eurozone falls into even more trouble, which many suggest they will, we may be in for another full 4 quarters at 1%. In the very least we should expect very marginal increases at perhaps .25%.

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