Bank of Canada likely to stand pat in October

The Bank of Canada is set to meet tomorrow for its interest rate decision. According to a TD Economics research report, the Canadian central bank is widely anticipated to keep its key interest rate on hold at 1.75 percent. Updated economic projections are likely to balance a better-than-expected 2019 with modest downgrades to the 2020 outlook.

Second quarter GDP and the third quarter inflation rate had come in above expectations from the previous MPR; however, the global backdrop has weakened since July which will be a drag on 2020’s GDP growth forecast.

“The policy statement should maintain a similar tone to September, with forward looking language focused on the global outlook and trade uncertainty”, added TD Economics.