The Bank of Canada building is seen in Ottawa on April 15, 2020. THE CANADIAN PRESS/Adrian Wyld

The Bank of Canada building is seen in Ottawa on April 15, 2020. THE CANADIAN PRESS/Adrian Wyld

Majority of economists expect Bank of Canada to stay put on interest rates: survey

The Bank of Canada has held its current rate since March 2020 when the COVID-19 pandemic was first declared

A majority of Canadian economists agree that the Bank of Canada will keep its key interest rate on hold instead of announcing a new overnight target Wednesday (June 9).

That’s according to a new Data Finder survey of 21 Canadian economists, of whom 95 per cent or 20 say they think the rate will remain where it’s been for more than a year, at 0.25 per cent.

More than half of the experts, 55 per cent, believe the central bank’s government won’t swap rates for another 10 to 18 months – all of the economists agree the next rate change will be an increase.

RELATED: Bank of Canada warns of rising risks from household debt, and a hot housing market

Roelof van Dijk, senior director of national research and analytics for Colliers International, worries a premature rate hike could pose a risk to debt-burdened Canadians.

“Although inflation has moved up, it is likely only transitory… the Bank of Canada is acutely aware of those households and businesses that took on additional debt to make ends meet during the pandemic and how rising interest rates will impact them, and economic growth.”

Hiking up interest rates would affect rates for people with mortgages and business loans, notes van Dijk. 

READ ALSO: Bank of Canada digital currency would be greener than Bitcoin, deputy says

The economist who thinks differently is Atif Kubursi, president of Econometric Research Ltd.

“Inflationary pressures are gathering and the Bank should make sure that these pressures do not engender inflationary expectations. I do not see a prospect of that given that we are likely to have an election call,” Kubursi says.

Rates expected to rise in 2022

Responses logged were vastly different from when Data Finder conducted the same study three months ago and only around half of the economists (52%) said the rate would hold.

In May, federal budget officer Yves Giroux says he expects the trend-setting interest rate will rise by half a percentage point in the second half of 2022 and until it hits 2.5 per cent.

Similarly, senior lecturer Moshe Lander of Concordia University says the second half of 2022 is the most feasible timeline for a rate hike.

“The bank needs to give the economy some time and space to breathe and figure out what things look like before acting. In that time, we are likely to see a federal election, so the Bank of Canada should hold off on its decision until there is some degree of calm.”

READ MORE: Bank of Canada keeps rate on hold, sees brighter economic outlook



sarah.grochowski@bpdigital.ca

Like us on Facebook and follow us on Twitter.

Want to support local journalism? Make a donation here.

economyinflation

Just Posted

Students at Creston Valley Secondary School put together an art installation of a replica residential school room. (Photo by Kelsey Yates)
Creston students create art installation of residential school room

The replica was decorated with a small bed, school uniform, and notes written with pleas for help

A living wage sets a higher standard than the minimum wage; it is what a family needs to earn to provide the basic needs based on the actual costs of living in a community.
Fruitvale now a living wage employer

“I’m really excited that Fruitvale is leading the charge for municipalities locally,” Morissette said.

Nelson police say a man attacked two people downtown with bear spray on Wednesday afternoon. File photo
Two people attacked with bear spray in downtown Nelson: police

Police say the three people know each other

Rotary eClub of Waneta Sunshine, alongside members from the Kootenay Native Plant Society and Trail Wildlife Association, joined together for a day of planting at Fort Shepherd. The Waneta Sunshine eClub was granted funds through an Express Grant from District 5080 to plant 50 shrubs which support pollinator opportunities at Fort Shepherd. Photos: Submitted
Kootenay conservation partners plant pollinator ‘superfoods’ at Fort Shepherd

TLC welcomes community groups to Fort Shepherd who would like to help local ecosystems thrive

Harold and Sadie Holoboff are bringing great food and service to the Eagle’s Nest Restaurant at Champion Lakes Golf and Country Club. Photo: Jim Bailey
West Kootenay golf course welcomes father-daughter team to restaurant

Chef Harold Holoboff brings comfort food to another level at Champion Lakes Eagle’s Nest Restaurant

People line up to get their COVID-19 vaccine at a vaccination centre, Thursday, June 10, 2021 in Montreal. THE CANADIAN PRESS/Ryan Remiorz
Vaccines, low COVID case counts increase Father’s Day hope, but risk is still there

Expert says people will have to do their own risk calculus before popping in on Papa

FILE – A science class at L.A. Matheson Secondary in Surrey, B.C. on March 12, 2021. (Lauren Collins/Surrey Now Leader)
Teachers’ union wants more COVID transmission data as B.C. prepares for back-to-school

BCTF says that details will be important as province works on plan for September

Provincial health officer Dr. Bonnie Henry outlines B.C.’s COVID-19 restart plan, May 25, 2021, including larger gatherings and a possible easing of mandatory masks on July 1. (B.C. government photo)
B.C. records 120 new COVID-19 cases, second vaccines accelerating

Lower Pfizer deliveries for early July, Moderna shipments up

A Heffley Creek peacock caught not one - but two - lifts on a logging truck this month. (Photo submitted)
Heffley Creek-area peacock hops logging trucks in search of love

Peacock hitched two lifts in the past month

The Calgary skyline is seen on Friday, Sept. 15, 2017. THE CANADIAN PRESS/Jeff McIntosh
2 deaths from COVID-19 Delta variant in Alberta, 1 patient was fully immunized

Kerry Williamson with Alberta Health Services says the patients likely acquired the virus in the hospital

The first suspension bridge is the tallest in Canada, with a second suspension bridge just below it. The two are connected by a trail that’s just over 1 km. (Claire Palmer photo)
PHOTOS: The highest suspension bridges in Canada just opened in B.C.

The Skybridge in Golden allows visitors to take in views standing at 130 and 80 metres

BC Green Party leader and Cowichan Valley MLA Sonia Furstenau introduced a petition to the provincial legislature on Thursday calling for the end of old-growth logging in the province. (File photo)
BC Green leader Furstenau introduces old-growth logging petition

Party calls for the end of old-growth logging as protests in Fairy Creek continue

B.C. Premier John Horgan leaves his office for a news conference in the legislature rose garden, June 3, 2020. (B.C. government photo)
B.C. premier roasted for office budget, taxing COVID-19 benefits

Youth addiction law that triggered election hasn’t appeared

A vial containing the Moderna COVID-19 vaccine is shown at a vaccination site in Marcq en Baroeul, outside Lille, northern France, Saturday, March 20, 2021. THE CANADIAN PRESS/AP/Michel Spingler
mRNA vaccines ‘preferred’ for all Canadians, including as 2nd dose after AstraZeneca: NACI

New recommendations prioritizes Pfizer, Moderna in almost all cases

Most Read