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Bank of Canada keeps key interest rate at one per cent

OTTAWA – The Bank of Canada has kept its trendsetting policy interest rate at one per cent until at least next year.

The central bank said economic conditions have worsened since its last comprehensive forecast in October and any further withdrawing of stimulus should be carefully considered.

The bank said household spending has been stronger than anticipated, but exports that support the manufacturing sector were weaker.

It blames disappointing productivity gains and the strong loonie, which makes Canadian goods more expensive in foreign markets, for the recent slowdown in economic recovery.

Carney hiked rates three times during the summer months but put a stop to his tightening policy in October after the recovery began exhibiting signs of stalling.

He was the only banker among the Group of Seven nations who had moved to raise rates since the recession.

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