Trade uncertainty and slowing immigration levels could restrict how high the Bank of Canada’s benchmark interest rate goes next year, according to a new report published by Capital Economics on Wednesday.
The report argues that the risks plaguing Canada’s growth prospects will likely rein in inflationary pressures—limiting the degree of monetary policy tightening needed to keep prices in check.
The Bank of Canada has held its benchmark interest rate at 2.25 percent since last October as it gauges how the U.S. trade dispute and war in Iran are affecting its outlook.
The central bank will issue updated forecasts for the economy and inflation at its next interest rate decision on Oct. 28….