OTTAWA — The Bank of Canada is keeping its trendsetting interest rate at one per cent for the remainder of the year.
The central bank's latest take on the economy is that conditions have weakened somewhat since it last reported in October, but that at least some of that is due to temporary factors.
As such, the bank is also keeping in place its extremely mild guidance that the next move will likely be to raise, not cut, interest rates, although the timing of that move appears to moving further into the future.
Both actions were anticipated by economists, who said after softening the bias in October, it was likely too early for the central bank to signal another directional shift, not matter how subtle.
The bank says it anticipates the pace of economic activity will pick up through 2013.
In a bit of a surprise, the bank notes that while household credit and household activity is beginning to decline, it remains to be seen whether the moderation will continue.
That is likely because the bank expects to keep interest rates, and as a result borrowing costs, at historic lows for likely another year.