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

White Rock beach was buzzing with activity on Father’s Day. (Aaron Hinks photo)
PHOTOS: White Rock beach buzzing with activity on Father’s Day

High of 27C drew hundreds of people to the beach

SFN councillor Joanne Charles, White Rock Mayor Darryl Walker and Coun. David Chesney listen to welcoming remarks from Chief Harley Chappell (Xwopokton). (FIle photo)
White Rock, SFN grieve together on National Indigenous Peoples Day

Residents encouraged to wear orange on Canada Day

Surrey RCMP are investigating after shots were fired at a white Jeep Saturday evening in Newton. (Shane MacKichan photo)
UPDATE: Surrey RCMP asking for video after shots fired in Newton

Surrey RCMP said a silver SUV shot at a white Jeep

A Grade 8 class at L.A. Matheson Secondary. March 2021. (Photo: Lauren Collins)
B.C.’s return-to-school plan good, but Surrey teachers hope there is room for adjustments

Surrey school district to receive $1.76M of the $25.6M provincial pandemic-related funding

Marco Mendicino, Minister of Immigration, Refugees and Citizenship during a press conference in Ottawa on Thursday, May 13, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Canada to welcome 45,000 refugees this year, says immigration minister

Canada plans to increase persons admitted from 23,500 to 45,000 and expedite permanent residency applications

FILE – Most lanes remain closed at the Peace Arch border crossing into the U.S. from Canada, where the shared border has been closed for nonessential travel in an effort to prevent the spread of the coronavirus, Thursday, May 7, 2020, in Blaine, Wash. The restrictions at the border took effect March 21, while allowing trade and other travel deemed essential to continue. (AP Photo/Elaine Thompson)
Feds to issue update on border measures for fully vaccinated Canadians, permanent residents

Border with U.S. to remain closed to most until at least July 21

A portion of the George Road wildfire burns near Lytton, B.C. in this Friday, June 18, 2021 handout photo. THE CANADIAN PRESS/HO, BC Wildfire Service *MANDATORY CREDIT*
Blaze near Lytton spread across steep terrain, says BC Wildfire Service

Fire began Wednesday and is suspected to be human-caused, but remains under investigation

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

(Black Press Media files)
Burnaby RCMP look for witnesses in hit-and-run that left motorcyclist dead

Investigators believe that the suspect vehicle rear-ended the motorcycle before fleeing the scene

Blair Lebsack, owner of RGE RD restaurant, poses for a portrait in the dining room, in Edmonton, Friday, June 18, 2021. Canadian restaurants are having to find ways to deal with the rising cost of food. THE CANADIAN PRESS/Jason Franson
Canadian restaurateurs grapple with rising food costs, menu prices expected to rise

Restaurants are a low margin industry, so there’s not a lot of room to work in additional costs

RCMP crest. (Black Press Media files)
Fort St. John man arrested after allegedly inviting sexual touching from children

Two children reported the incident to a trusted adult right away

A police pursuit involving Abbotsford Police ended in Langley Saturday night, June 20. (Black Press Media file)
Abbotsford Police pursuit ends in Langley with guns drawn

One person arrested, witnesses say an officer may have been hurt in collision with suspect vehicle

(file)
Pedestrian hit by police vehicle in Langley

Injuries described as serious, requiring surgery

Most Read