28 February 2011
The problem is that the fourth-quarter gains may provoke the Bank of Canada to start talking about raising interest rates, though markets expect it to keep the rates unchanged tomorrow.
The BoC has raised its key rate three times during the June-September period, so today it’s 1%. Analysts polled by Reuters said the most likely date for a future rate increase is May 31.
Speaking about the recovery, Canadian policymakers note that higher net exports and business investment are the most necessary things today, and not the consumer spending, housing and fiscal stimulus.