Bank of Canada holds rate at 5%

The Canadian central bank on Sept 6 maintained its benchmark interest rate at 5%, as it noted the “economy has entered a period of weaker growth, which is needed to relieve price pressures.”

•  “Household credit growth slowed as the impact of higher rates restrained spending among a wider range of borrowers.”
• ” The tightness in the labour market has continued to ease gradually. However, wage growth has remained around 4% to 5%.”

However, the “Governing Council remains concerned about the persistence of underlying inflationary pressures and is prepared to increase the policy interest rate further if needed.”

•  “With the recent increase in gasoline prices, CPI inflation is expected to be higher in the near term before easing again.”
• “Year-over-year and three-month measures of core inflation are now both running at about 3.5%, indicating there has been little recent downward momentum in underlying inflation.”