27 January 2006

Monetary Policy Report from the Canadian Chamber of Commerce

The following is extracted from the Canadian Chamber of Commerce’s most recent economic update.

… The Bank tweaked its forecasts only slightly - real GDP growth for 2006 has been revised up to 3.1% from its previous call of 2.9%; and growth for 2007 has been revised slightly down to 2.9% from its previous prediction of 3.0%. With the economy operating at full capacity, inflation expectations well anchored, and wages rising at a robust pace, I expect the Bank of Canada will increase its key policy interest by 25 basis points on March 7 and April 25. This will take the overnight rate to 4%.