The Bank of Canada is seen in Ottawa on May 30, 2018. THE CANADIAN PRESS/Sean Kilpatrick

Canada could raise interest rates this week

Canada faces a number of trade-related uncertainties, including NAFTA talks, U.S. tariffs and the threat of more duties

After waiting for half a year, Stephen Poloz appears ready to get back on his rate-hiking path this week.

Recent signals from the Bank of Canada governor, combined with strong economic data, have experts widely predicting Poloz will raise his trend-setting rate Wednesday from its current level of 1.25 per cent.

Citing a cautious, data-dependent approach, Poloz hasn’t touched the rate since he increased it in January, a move that followed increases last year in September and July.

Another rate increase this week would come with Canada facing a number of trade-related uncertainties, including NAFTA talks, U.S. steel and aluminum tariffs and the threat of more duties on the economically critical automotive sector.

But TD chief economist Beata Caranci says she expects Poloz to work with the data he has in front of him and many analysts point to healthy numbers of late — including the Bank of Canada’s own survey on business sentiment, jobs numbers and growth in wages.

Caranci says if the trade dispute deteriorates further she believes hiking the interest rate now would give Poloz more flexibility to possibly lower it down the road, if necessary.

While expectations are high that Poloz will raise the rate this week, some experts predict the ongoing trade uncertainty will be enough to keep Poloz on hold for a little longer.

The National Bank of Canada wrote in a recent note that trade developments since the central bank’s last meeting, including stalled NAFTA talks and a possible trade war between the U.S. and China, will be enough to give Poloz pause.

In making the call, the National Bank acknowledged that it’s an outlier in a market that widely sees the right conditions for another increase.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

FOCUS: New arena, more ice in Surrey – but will it be enough for everyone?

With both rinks to close at North Surrey rec, the result is a net gain of one ice sheet this fall

‘Powerful’ Punjabi youth writing contest lauded in Surrey

The Dhahan Prize contest invites B.C. teens to connect to their culture through storytelling

Accused Surrey transit cop shooter’s bail hearing set for April

Daon Gordon Glasgow, 35, is accused of shooting Transit Police Constable Josh Harms, 27

UPDATE: Three to hospital following house fire in South Surrey

Emergency crews knock down blaze at townhome in the 2700-block of 158 Street

BC Ferries has no plans to implement debit for vehicle ticket payments

Debit accepted for foot passengers, on-board purchases for all vessels

VIDEO: RCMP ask kids to help name soon-to-be police dogs

13 German shepherd puppies will be born this year

Kids found playing darts with syringes in Vancouver Island park

Saanich police is urging people to throw out their syringes properly and safely

5 to start your day

IIO BC probe arrest at Surrey vigil for mosque shooting, Maple Ridge closes homeless evacuation centre and more

‘The whole city has changed:’ B.C. woman in New Zealand reacts to mosque attacks

An expatriate and Muslim students at UBC Okanagan deeply affected by white supremacist shooting

Trudeau condemns hateful, ‘toxic segments’ of society after New Zealand shooting

Prime Minister expressed sorrow at the many attacks in recent years

Air Canada grounds its Boeing Max 8s until at least July 1 to provide certainty

Airlines around the world have been working to redeploy their fleets since their Max 8s were grounded last week

Budget to tout Liberal economic record, provide distraction from SNC furor

This is the Liberal government’s fourth and final budget before the election

Horvat scores 16 seconds into OT as Canucks beat Blackhawks 3-2

Pettersson sets rookie scoring record for Vancouver

Vancouver Island overdue for the big one, can also expect mega-thrust tsunami

The last big earthquake was 70 years ago in Courtenay

Most Read