Canadians with a variable-rate mortgage or thinking of getting a loan can rest assured the Bank of Canada is not raising its key lending rate, at least not now.
It opted not to change its key lending rate in an announcement on Wednesday morning. The overnight rate will remain at 5 per cent, with the Bank Rate at 5 1/4 per cent and the deposit rate at 5 per cent.
The bank decided to continue its policy of quantitative tightening over concerns about price stability and inflationary risks.
"The global economy is slowing, and growth is forecast to moderate further as past increases in policy rates and the recent surge in global bonds yields weigh on demand," said the bank in a release. "The Bank projects global GDP growth of 2.9 per cent this year, 2.3 per cent in 2024, and 2.6 per cent in 2025."
Since the July Monetary Policy Report, the bank said the U.S. economy has proven more resilient than expected, while economic activity in China has weakened.
"Inflation has been easing in most economies, as supply bottlenecks resolve and weaker demand relieves price pressures," the bank said. "However, with underlying inflation persisting, central banks continue to be vigilant."
At home, the bank credits past interest rate increases for dampening economic activity and relieving price pressures.
"Consumption has been subdued, with softer demand for housing, durable goods, and many services," it said. "Overall, a range of indicators suggest that supply and demand in the economy are now approaching balance."
However, it noted the labour market is still tight, and the surge in Canada's population has increased demand for housing.
The bank predicts economic growth in Canada will be weak for the next year, only expanding by 1.2 per cent this year and 0.9 per cent next. It forecasts a pickup in late 2024 and 2.5 per cent growth in 2025.
Inflation was 3.8 per cent in September, and with a goal of 2 per cent inflation, the bank hasn't ruled out future rate increases.
The next interest rate announcement is December 6.
