Bank of Canada holds rates at 2.25%, as expected

(Sharecast News) - The Bank of Canada held interest rates on hold at 2.25% on Wednesday, as widely expected. The Bank said in a statement: "If inflation and economic activity evolve broadly in line with the October projection, Governing Council sees the current policy rate at about the right level to keep inflation close to 2% while helping the economy through this period of structural adjustment.

"Uncertainty remains elevated. If the outlook changes, we are prepared to respond. The Bank is focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval."

It also said the 2.6% growth in Canada's economy in the third quarter was "surprisingly strong", even as final domestic demand was flat.

"The increase in GDP largely reflected volatility in trade," it said. "The Bank expects final domestic demand will grow in the fourth quarter, but with an anticipated decline in net exports, GDP will likely be weak."

It said growth was forecast to pick up next year, although uncertainty remains high and large swings in trade may continue to cause quarterly volatility.