Panel expects Bank of Canada to hold rate

OTTAWA: The Bank of Canada interest rate increase means higher borrowing costs for consumers with variablerate mortgages, loans or lines of credit The Bank of Canada interest rate increase means higher borrowing costs for consumers with variable-rate mortgages, loans or lines of credit

The Bank of Canada will make its next overnight rate announcement on May 29, with seven experts surveyed by online financial comparison site, Finder, predicting the Bank will hold the rate at 1.75 percent.

"Canadian data continues to be contradictory," said Moshe Lander, professor of economics at Concordia University, adding he believes the Bank has no choice. "Stronger-than-expected job growth, a lower unemployment rate and stock market gains in 2019 are balanced against a slowing property market, continued trade tensions, political uncertainty and falling business confidence, leaving the Bank of Canada in a no-win situation. Best to wait and see."

Alicia MacDonald, principal economist at The Conference Board of Canada, said, "Recent economic data suggest that growth will be stronger than the Bank was expecting in the first quarter, providing a reason to not cut rates. "At the same time, growth will remain below potential, providing no reason to lift rates. The Bank of Canada will therefore remain in a holding pattern for now and make any necessary adjustments to that stance based on incoming economic data."

With seven panelists anticipating a rate hold, five expect the next rate movement, regardless of when it happens, will be a rate increase, with two expecting the rate to fall.