![\"bank-of-canada\"](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2019\/10\/bank-of-canada-compressed.jpg\")
<\/a><\/p>\nPhoto: James Bombales<\/em><\/p>\n The Bank of Canada won\u2019t be hiking its policy rate any time soon, says one economist \u2014 and that should be welcome news for mortgage borrowers with variable rates.<\/p>\n On Wednesday, Canada\u2019s central bank held its policy rate, which influences variable mortgage rates, at 1.75 percent, where it has stood since October.<\/p>\n \u201cIn its policy statement [the Bank of Canada] dropped any reference to future interest rate hikes,\u201d notes Stephen Brown, the senior Canada economist for Capital Economics, in a response to the latest policy decision.<\/p>\n\n That\u2019s a departure from previous central bank announcements as well as the consensus among market watchers not so long ago. It signals the Bank of Canada \u201cgives up on future rate hikes,\u201d the report suggests.<\/p>\n Towards the end of last year, it was generally anticipated the Bank of Canada would continue on its path of gradually increasing the overnight rate, as it\u2019s also called \u2014 possibly twice in 2019.<\/p>\n Since the summer of 2017, the bank has hiked the overnight rate by 25 basis points for a total of five times.<\/p>\n Looking ahead, the general consensus is now that the bank won\u2019t be hiking the rate again this year, with GDP growth weaker than expected amid broad housing downturns in Western Canada\u2019s major markets and a still-weakened energy sector. Most in the no-hike camp say the bank will remain on the sidelines this year.<\/p>\n The central bank now projects that Canada\u2019s economy will expand by a paltry 0.3 percent in the first quarter.<\/p>\n Capital Economics \u2014 while among one of the earlier observers to write off any near-term rate hikes \u2014 still remains an outlier; it forecasts the policymakers will trim the overnight rate three times, with the first cut coming as early as the second half of 2019.<\/p>\n \u201cOverall, we think that the economy could fare a bit better in the near term than the Bank expects,\u201d writes Brown. \u201cBut that doesn\u2019t change our view that persistently below-potential GDP growth this year will cause the Bank to cut interest rates three times, starting in the third quarter,\u201d he continues.<\/p>\n The Bank of Canada won\u2019t be hiking its policy rate any time soon, says one economist \u2014 and that should be welcome news for mortgage borrowers with variable rates.<\/p>\n","protected":false},"author":23,"featured_media":196942,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","apple_news_api_created_at":"2019-04-25T14:52:30Z","apple_news_api_id":"b8fd5251-8c36-403e-bd93-e3d606795701","apple_news_api_modified_at":"2019-10-28T13:51:17Z","apple_news_api_revision":"AAAAAAAAAAAAAAAAAAAAAQ==","apple_news_api_share_url":"https:\/\/apple.news\/AuP1SUYw2QD69k-PWBnlXAQ","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_is_hidden":false,"apple_news_is_paid":false,"apple_news_is_preview":false,"apple_news_is_sponsored":false,"apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"middle","apple_news_slug":"","apple_news_sections":["https:\/\/u48r14.digitalhub.com\/sections\/09b86915-7d2b-3acd-915b-b215002d01b7"],"apple_news_suppress_video_url":false,"apple_news_use_image_component":false,"footnotes":""},"categories":[11269],"tags":[],"coauthors":[8692],"apple_news_notices":[],"yoast_head":"\n