The Bank of Canada announced Wednesday it is keeping its trendsetting interest rate steady at one per cent, as widely expected.
After two consecutive hikes in July and September, Canada’s central bank passed on the chance implement another rise in 2017.
The statement accompanying the release offered few clues as to when the next increase might come.
Though the bank noted that “higher interest rates will likely be required over time,” it also said it remained “cautious.”
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There was no indication of whether a further increase could come on Jan. 17, the next scheduled rate update. Rather, the BoC said it would “be guided by incoming data in assessing the economy’s sensitivity to interest rates, the evolution of economic capacity, and the dynamics of both wage growth and inflation.”
“We, like others, will have to watch upcoming data on October GDP and December employment to fine-tune forecasts for when the next hike comes,” Avery Shenfeld, chief economist at CIBC Capital Markets said in a note after the announcement.
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Still, the BoC pointed to several positives that could support another increase in the coming months, such as encouraging job and wage growth, sturdy business investment and the resilience of consumer spending despite heavy debt loads and higher borrowing costs.
It also said the economic benefits from government infrastructure investments are becoming increasingly evident in the economic data.
On the other hand, the bank said exports have slipped more than expected in recent months after a powerful start to the year and noted that the international outlook faces considerable uncertainty mostly due to geopolitical- and trade-related factors.
– With files from the Canadian Press