For four years straight the Bank of Canada Prime rate will stay at 3%. There was nothing in the statement from the Bank of Canada that hints there will be an increase in the short term either. Some points from the statement:
- Inflation is close to the 2% target and is on track with what the Bank anticipated in it’s July Monetary Policy Report.
- The Bank’s data shows the recent uptick in inflation was due to temporary factors vs. fundamental economic factors.
- The global economy is performing as expected with the Ukraine situation slowing the Europe recovery.
- Solid recovery seems to be on track in the US.
- The housing market has been stronger than anticipated
- The Bank still believes our economy could operate below capacity for the next 2 years
The Bank remains neutral when it comes to the next change to the policy rate which typically means we will not see any change anytime soon. The next scheduled announcement for the overnight rate is October 22, 2014.