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

A person receives a COVID-19 vaccine at a vaccination clinic run by Vancouver Coastal Health, in Richmond, B.C., Saturday, April 10, 2021. Northern Health confirmed it has the lowest vaccination rates amongst the province’s five regional health authorities. (THE CANADIAN PRESS/Jonathan Hayward)
Vaccination rates in Vanderhoof, Fraser Lake, Fort St James well below provincial average

COVID-19 immunization clinics for youth 12+ coming up in Fort St. James

Steve McAdam (left) is studying substrate conditions in the Nechako River and how they impact sturgeon eggs. The work will help design habitat restoration measures, said McAdam. (Rebecca Dyok photo)
Sturgeon egg studies to help inform future habitat restoration

“It’s an interesting, challenging issue,” says Steve McAdam

Saik’uz First Nation Coun. Jasmine Thomas and Chief Priscilla Mueller speak about the need for addiction treatment facility near Vanderhoof, March 2021. (Aman Parhar/Omineca Express)
Vanderhoof addiction treatment centre tries again with ministry support

Agriculture minister insists she is not interfering in land commission

At an outdoor drive-in convocation ceremony, Mount Royal University bestows an honorary Doctor of Laws on Blackfoot Elder and residential school survivor Clarence Wolfleg in Calgary on Tuesday, June 8, 2021. THE CANADIAN PRESS/Jeff McIntosh
‘You didn’t get the best of me’: Residential school survivor gets honorary doctorate

Clarence Wolfleg receives honorary doctorate from Mount Royal University, the highest honour the school gives out

“They will never be forgotten, every child matters,” says Sioux Valley Chief Jennifer Bone in a video statement June 1. (Screen grab)
104 ‘potential graves’ detected at site of former residential school in Manitoba

Sioux Valley Dakota Nation working to identify, repatriate students buried near former Brandon residential school

The Queen Victoria statue at the B.C. legislature was splattered with what looks like red paint on Friday. (Nicole Crescenzi/News Staff)
Queen Victoria statue at B.C. legislature vandalized Friday

Statue splattered with red paint by old growth forest proponents

Police cars are seen parked outside Vancouver Police Department headquarters on Saturday, January 9, 2021. THE CANADIAN PRESS/Darryl Dyck
Vancouver police officer charged with assault during an arrest in 2019

The service has released no other details about the allegations

Denmark’s Christian Eriksen receives medical attention after collapsing during the Euro 2020 soccer championship group B match between Denmark and Finland at Parken stadium in Copenhagen, Saturday, June 12, 2021. (AP Photo/Martin Meissner, Pool)
Christian Eriksen in stable condition, Euro 2020 match resumes

Eriksen was given chest compressions after collapsing on the field during a European Championship

Members of the Department of Fisheries and Oceans’ Marine Mammal Response Program rescued an adult humpback what that was entangled in commercial fishing gear in the waters off of Entrance Island on Thursday, June 10. (Photo courtesy Marine Mammal Response Program)
Rescuers free humpback ‘anchored’ down by prawn traps off Vancouver Island

Department of Fisheries and Oceans responders spend hours untangling whale

As stories of the horrors of residential schools circulate after the Tk’emlups te Secwepemc First Nation announced it had located what are believed to be the remains of 215 children, Grand Chief Stewart Phillip of the Union of B.C. Indian Chiefs said he feels a connection with the former students. THE CANADIAN PRESS/Darryl Dyck
2 sides of the same coin: Ex-foster kids identify with residential school survivors

Grand Chief Stewart Phillip says the child welfare system takes Indigenous children from their families

Nathan Watts, a member of the Tseshaht First Nation near Port Alberni, shares his story of substance use, a perspective he said isn’t seen enough. (Photo courtesy of Nathan Watts)
Public shaming, hate perpetuates further substance use: UVic researcher

Longtime addict Nathan Watts offers a user’s perspective on substance use

Most Read