Bank of Canada to update economic outlook with first rate announcement of 2021


OTTAWA — Canada’s central bank will update its economic forecast for the country Wednesday when it announces its interest-rate decision, offering a glimpse into its outlook for COVID-19 recovery.

The Bank of Canada said in October the country had been spared from a worst-case economic scenario, but it still didn’t see a recovery taking hold until at least 2022.

Since then, case numbers have grown and severe restrictions put in place in parts of the country to curb the spread of COVID-19.

Given the economic conditions, there is widespread expectation that the Bank of Canada will decide today to keep its trendsetting policy rate at 0.25 per cent.

Bank governor Tiff Macklem has said the key rate won’t move from near-zero until inflation is back at the bank’s two-per-cent target.

Separately this morning, Statistics Canada will release its headline inflation reading for December.

Financial data firm Refinitiv says the average economist estimate is for a one per cent increase in prices at the end of 2020 compared to the same month in 2019.