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Timing of next rate hike in question after surprise stall in August GDP
Economists cut growth forecasts after the surprise reading, and market odds of a December rate hike fell to 57 per cent, LSEG Data & Analytics said.
- Statistics Canada reported Friday that Canada's GDP remained essentially unchanged in August, falling short of the agency's earlier expectations for 0.2 per cent growth.
- Two days earlier, The Bank raised its benchmark interest rate by a quarter point to 2.5 per cent, the first hike in more than three years, as Officials sought to get ahead of inflation risks.
- Manufacturing declined 5.8 per cent due to a "prolonged summer shutdown at a major auto assembly plant," while Wholesale trade fell 1.4 per cent and census-related contractions plus Maintenance work in Alberta also dragged on growth.
- Financial markets priced a 57 per cent chance of a rate hike on Dec. 9, while BMO chief economist Doug Porter said growth has "run into some pretty serious headwinds of late."
- RSM Canada economist Tu Nguyen called the December-versus-January rate decision a "coin flip," while The Bank projects real GDP growth of two per cent in 2027 and 2028 despite near-term weakness.
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6 Articles
6 Articles
Coverage Details
Total News Sources6
Leaning Left3Leaning Right1Center2Last UpdatedBias Distribution50% Left
Bias Distribution
- 50% of the sources lean Left
50% Left
L 50%
C 33%
R 17%
Factuality
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