As was pretty much expected, the Bank of Canada held the overnight interest rate at 1 ¾% this week, citing a weaker outlook for the Canadian economy. The softer tone from the Bank is in direct contrast to what they said when they last met October 24. Since that time, oil prices have fallen considerably and the global economy has moderated. Alberta’s energy woes have affected the economy; the premier has ordered production cuts due to the excessive inventory that has put downward pressure on oil prices. This has lead the Bank to determine that Canada’s energy sector will be “materially weaker” than anticipated.
The expectation for the January Bank of Canada meeting is that the Bank will hold the rate at the status quo.
If you have any questions about your variable rate mortgage, or rates in general, don’t hesitate to contact me for further information, at 905.336.3545 or donnal@dominionlending.ca .
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