The Bank of Canada building is seen in Ottawa on April 15, 2020. THE CANADIAN PRESS/Adrian Wyld

The Bank of Canada building is seen in Ottawa on April 15, 2020. THE CANADIAN PRESS/Adrian Wyld

Majority of economists expect Bank of Canada to stay put on interest rates: survey

The Bank of Canada has held its current rate since March 2020 when the COVID-19 pandemic was first declared

A majority of Canadian economists agree that the Bank of Canada will keep its key interest rate on hold instead of announcing a new overnight target Wednesday (June 9).

That’s according to a new Data Finder survey of 21 Canadian economists, of whom 95 per cent or 20 say they think the rate will remain where it’s been for more than a year, at 0.25 per cent.

More than half of the experts, 55 per cent, believe the central bank’s government won’t swap rates for another 10 to 18 months – all of the economists agree the next rate change will be an increase.

RELATED: Bank of Canada warns of rising risks from household debt, and a hot housing market

Roelof van Dijk, senior director of national research and analytics for Colliers International, worries a premature rate hike could pose a risk to debt-burdened Canadians.

“Although inflation has moved up, it is likely only transitory… the Bank of Canada is acutely aware of those households and businesses that took on additional debt to make ends meet during the pandemic and how rising interest rates will impact them, and economic growth.”

Hiking up interest rates would affect rates for people with mortgages and business loans, notes van Dijk. 

READ ALSO: Bank of Canada digital currency would be greener than Bitcoin, deputy says

The economist who thinks differently is Atif Kubursi, president of Econometric Research Ltd.

“Inflationary pressures are gathering and the Bank should make sure that these pressures do not engender inflationary expectations. I do not see a prospect of that given that we are likely to have an election call,” Kubursi says.

Rates expected to rise in 2022

Responses logged were vastly different from when Data Finder conducted the same study three months ago and only around half of the economists (52%) said the rate would hold.

In May, federal budget officer Yves Giroux says he expects the trend-setting interest rate will rise by half a percentage point in the second half of 2022 and until it hits 2.5 per cent.

Similarly, senior lecturer Moshe Lander of Concordia University says the second half of 2022 is the most feasible timeline for a rate hike.

“The bank needs to give the economy some time and space to breathe and figure out what things look like before acting. In that time, we are likely to see a federal election, so the Bank of Canada should hold off on its decision until there is some degree of calm.”

READ MORE: Bank of Canada keeps rate on hold, sees brighter economic outlook



sarah.grochowski@bpdigital.ca

Like us on Facebook and follow us on Twitter.

Want to support local journalism? Make a donation here.

economyinflation

Just Posted

Kaleb Robertson at bat during the 18UAAA North Island Cubs season opener against the Cowichan Valley Mustangs on June 19, 2021. Photo by Sean Feagan / Black Press Media.
PHOTOS: Minor baseball players and fans welcome return to play

18UAAA Cubs start regular season action after long wait with convincing win against Mustangs

Black Press file photo
RCMP seek suspect in Vancouver Island-wide crime spree

Crimes stretched from Deep Bay to Qualicum, Ladysmith, Chemainus and Youbou

New literacy framework will allow teachers to assess whether students have the necessary skills to become strong readers, and intervene early if they need help. Photo by Marissa Tiel/Campbell River Mirror
Campbell River school board creating new literacy framework

New plan aims to reverse declining literacy in SD72

Duncan Hurd says his fence has been smashed multiple times in the past month. Photo courtesy Duncan Hurd
Vandalism escalating in Campbell River neighbourhood, resident says

Neighbours want to see vandals ‘identified’

Kandi Kehler has just over two weeks left in her rental, but doesn’t know where she is going to go next. Photo by Marc Kitteringham / Campbell River Mirror
12 days left: Campbell River family at end of lease with nowhere else to go

Biggest fear coming to life for Campbell River mom

Marco Mendicino, Minister of Immigration, Refugees and Citizenship during a press conference in Ottawa on Thursday, May 13, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Canada to welcome 45,000 refugees this year, says immigration minister

Canada plans to increase persons admitted from 23,500 to 45,000 and expedite permanent residency applications

Blair Lebsack, owner of RGE RD restaurant, poses for a portrait in the dining room, in Edmonton, Friday, June 18, 2021. Canadian restaurants are having to find ways to deal with the rising cost of food. THE CANADIAN PRESS/Jason Franson
Canadian restaurateurs grapple with rising food costs, menu prices expected to rise

Restaurants are a low margin industry, so there’s not a lot of room to work in additional costs

RCMP crest. (Black Press Media files)
Fort St. John man arrested after allegedly inviting sexual touching from children

Two children reported the incident to a trusted adult right away

A Lotto 6/49 ticket purchased in Parksville for the June 19, 2021 draw is a $3M winner. (Submitted photo)
Winning Lotto 6/49 ticket worth $3M purchased on Vancouver Island

Lottery prize winners have 52 weeks to claim jackpot

Barbara Violo, pharmacist and owner of The Junction Chemist Pharmacy, draws up a dose behind vials of both Pfizer-BioNTech and Oxford-AstraZeneca COVID-19 vaccines on the counter, in Toronto, Friday, June 18, 2021. An independent vaccine tracker website founded by a University of Saskatchewan student says just over 20 per cent of eligible Canadians — those 12 years old and above — are now fully vaccinated. THE CANADIAN PRESS/Nathan Denette
At least 20% of eligible Canadians fully vaccinated, 75% with one dose: data

Earlier projections for reopening at this milestone didn’t include Delta variant

This undated file photo provided by Ernie Carswell & Partners shows the home featured in the opening and closing scenes of The Brady Bunch in Los Angeles. Do you know the occupation of Mike Brady, the father in this show about a blended family? (Anthony Barcelo/Ernie Carswell & Partners via AP, File)
QUIZ: A celebration of dad on Father’s Day

How much do you know about famous fathers?

Emily Steele holds up a collage of her son, 16-year-old Elijah-Iain Beauregard who was stabbed and killed in June 2019, outside of Kelowna Law Courts on June 18. (Aaron Hemens/Capital News)
Kelowna woman who fatally stabbed teen facing up to 1.5 years of jail time

Her jail sentence would be followed by an additional one to 1.5 years of supervision

Cpl. Scott MacLeod and Police Service Dog Jago. Jago was killed in the line of duty on Thursday, June 17. (RCMP)
Abbotsford police, RCMP grieve 4-year-old service dog killed in line of duty

Jago killed by armed suspect during ‘high-risk’ incident in Alberta

The George Road wildfire near Lytton, B.C., has grown to 250 hectares. (BC Wildfire Service)
B.C. drone sighting halts helicopters fighting 250 hectares of wildfire

‘If a drone collides with firefighting aircraft the consequences could be deadly,’ says BC Wildfire Service

Most Read