The Globe and Mail reports in its Friday, Feb. 1, edition that the Bank of Canada is convinced the economy is poised to rebound after a "detour" caused by lower oil prices and a slowdown in the housing market.
The Globe's Barrie McKenna writes that the BOC expects economic growth to bounce back in the second quarter, senior deputy governor Carolyn Wilkins said Thursday in Toronto.
There has been speculation in financial markets about a possible recession as early as this year. The BOC, however, is not buying it.
Ms. Wilkins said, "We expect the economic expansion to pick up again after this detour."
Ms. Wilkins's use of the word "detour" -- a new one for the bank -- reinforces its conviction that the current soft patch will be short-lived and that it is still committed to pushing rates higher.
Nonetheless, the bank is being cagey about the direction and timing of its next interest-rate move. Ms. Wilkins said there are risks "on both sides of the outlook." The slowdown was evident in the latest GDP figures released Thursday. Canada's economy shrank 0.1 per cent in November.
The BOC has put on hold a plan to get its key interest rate up to the so-called neutral rate.
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