Carney keeps key lending rate steady at 1% in final announcement
Published Wednesday, May 29, 2013 10:04AM EDT
Last Updated Wednesday, May 29, 2013 11:32AM EDT
In his last interest rate announcement as governor of the Bank of Canada, Mark Carney issued a steady-as-she-goes update, once again leaving the key lending rate at 1 per cent.
Carney is leaving his post to head up the Bank of England beginning on July 1.
The announcement makes this the 22nd consecutive month that the key interest rate has held at 1 per cent, dating back to September 2010.
"We have a very status quo statement. There was no attempt to provide some flare, I suppose, on his way out which I'm sure the new governor Stephen Poloz is very thankful for, so he starts with something amounting to a blank state," chief economist with RBC Global Asset Management Eric Lascelles told CTV News Channel.
In its statement released Wednesday morning, the Bank of Canada said global economic growth is in line with expectations set out in the April Monetary Policy Report.
It pointed out that U.S. economic expansion is progressing, though at a "modest pace," with a strengthening private sector. Japan has been a bright spot in the global economy, the report said, noting that it is "beginning to respond to significant policy stimulus."
"Europe, in contrast, remains in recession. Growth in China has continued to ease from very strong rates, weighing somewhat on global commodity prices," according to the central bank.
Growth in Canada appears to have been stronger in the first quarter of 2013 than predicted, and for the rest of the year growth is expected to remain in line with the bank's forecast.
Consumer spending is expected to grow at a moderate pace in Canada, while business investment increases "solidly," the statement said. Residential investment is expected to continue to decline from historic highs.
Inflation has been weaker than expected, the central bank said, suggesting there is no rush to increase borrowing costs.
"Ultimately the Bank of Canada is still mostly comfortable with its outlook for Canada saying growth has been a little stronger, inflation a little weaker, the main message is rates are on hold," Lascelles told CTV News Channel.
"They think rates could eventually go higher but the key word there is 'eventually' and there seems to be no urgency behind that statement."