Bank of Canada to update economic outlook, make rate announcement

OTTAWA —
The Bank of Canada will update its economic outlook for the country this morning as makes its latest interest rate announcement.

Since the central bank’s last outlook in April, first-quarter growth figures came in below its forecast and it’s possible the second quarter will also fall short of expectations.

The bank said last month the economy should rebound strongly starting this summer as it kept its key policy rate on hold at 0.25 per cent, which is where it has sat since the onset of the pandemic last year.

CIBC chief economist Avery Shenfeld says the central bank likely won’t make major changes to its economic outlook, but it may have to upgrade its inflation forecast.

The C.D. Howe Institute’s monetary policy council has recommended the bank keep its key rate on hold at 0.25 per cent.

The group also recommended the central bank scale back its federal bond purchases from its target of $3 billion per week.

This report by The Canadian Press was first published July 14, 2021.