*BoC Keeps Key Rate Unchanged

The market widely predicted the Bank of Canada would not raise rates, and it was right. The BoC has left its key lending rate at 1.00%.

In turn, prime rate will remain at 3.00%, making today’s BoC meeting a non-event for mortgage holders in the short-term.

The BoC’s call comes amid languid recent growth and inflation numbers. Here’s a sampling of the Bank’s commentary from its official statement:

The BoC sees a “weaker-than-projected recovery in the United States.” (No revelations there)
The potential exists for “a more protracted and difficult global recovery.”
“…domestic considerations…are expected to slow consumption and housing activity in Canada.”
“Inflation in Canada has been slightly below the Bank’s July projection.”
“The inflation outlook has been revised down and both total CPI and core inflation are now expected to converge to 2% by the end of 2012.” (That’s potential good news for mortgage rates)
The 1% overnight target rate “leaves considerable monetary stimulus in place.”

The next and final interest rate meeting of 2010 is on December 7.

*BoC Keeps Key Rate Unchanged – Canadian Mortgage Trends – October 19, 2010

Kimberly Walker