The interest rate hikes Canadians have been (repeatedly) warned about may be put off until early 2012, according to TD Economics.
Most analysts expected the Bank of Canada to raise its interest rates in September in order to contain a soaring loonie and discourage the Canadian consumer’s apparently insatiable appetite for debt. However, with a fragile post-recession global economy and a U.S, Federal Reserve happy to leave its rate at historically low levels, the Bank of Canada has little choice but to postpone rate hikes for the short-term. TD economists expect the 1% interest rate to remain until 2012, when it is expected to double to 2%.
However, should inflation begin to rise economists predict the central bank will have to raise interest rates sooner than expected.