11 January 2011
It’s obvious that the bank realizes how risky today’s low interest rates can be. Yes, we have to watch for inflation, but low rates can be the reason for a rising household debt level.
In addition to it, Cote said that without a serious change in people’s behavior the household debt level will keep growing. She believes the responsibility for this debt increase lies on both borrowers and financial institutions. “The households should understand they can afford paying off their debts in the future. And the financial institutions have to be sure their clients don’t take the debts they can’t afford”.
In the same time, according to the BoC Business Outlook Survey for the October-December period, many companies are quite optimistic about the next 12 months: 49 % of companies expected to raise their employment in the next 12 months. Let’s not forget that in the third quarter it was only 39%.