24 April 2014
Due to the aging workforce and interest rates staying extremely low for years, moderate increases will be enough for keeping the inflation under control.
This announcement shows a certain change in the BoC’s tone: the Bank has been repeatedly warning borrowers about being reasonable with their debts, as someday interest rates will start going up.
Today Poloz once again said the risks of a housing bubble are quite weak, and now we can see an expected soft landing in the real estate market.
As you know, the Bank of Canada has kept its lending rate at 1% since September 2010, but in fact rates were below the normal level in 2008 already.
Earlier Stephen Poloz hinted he could have cut rates in attempt to support the economic growth, but he didn’t want to encourage borrowing, especially, in the real estate market.