By Canadian Press

Bank of Canada scheduled to make last rate call of 2021

Dec 8, 2021 | 4:03 AM

Update 8:03 am

OTTAWA – The Bank of Canada is keeping its key interest rate target on hold at its rock-bottom level of 0.25 per cent.

In a statement, the central bank also says senior decision makers don’t expect to raise the trendsetting rate until some time between April and September next year, which is unchanged from its previous guidance.

The Bank of Canada also warns that high inflation rates will continue through the first half of next year.

The Bank of Canada says it won’t be until the second half of 2022 that inflation falls back towards the bank’s comfort zone of between one and three per cent.

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By the end of next year, the bank is forecasting the annual inflation rate to fall to 2.1 per cent.

The bank says it is keeping a close eye on expectations for price growth and wage growth to make sure they don’t create a spiral of price increases.

(The Canadian Press)

OTTAWA — The Bank of Canada is set today to announce what will happen to its trendsetting interest rate with job and inflation figures on the rise.

The central bank’s key interest rate target has been at the rock-bottom level of 0.25 per cent since the onset of the pandemic in March 2020 and is unlikely to be raised as part of the last scheduled rate call for 2021.

The bank has said it won’t raise the rate until the economy has healed enough to handle an increase.

The economy grew at an annual rate of 5.4 per cent in the third quarter, almost in line with the bank’s expectations, and job gains in November lowered the unemployment rate to within 0.3 percentage points of what was recorded in February 2020 just before the pandemic.

At the same time, inflation remains above the central bank’s target range of one and three per cent.

Although senior bank officials have said a rate hike could happen as early as April, the updated economic indicators released last week by Statistics Canada had some economists saying a rate increase in January couldn’t be ruled out.

This report by The Canadian Press was first published Dec. 8, 2021.

The Canadian Press