Canada rate hike views pushed back as economy struggles: Reuters poll
By Alastair Sharp and Solarina Ho
TORONTO (Reuters) - Half of Canada's primary dealers have recently pushed back forecasts for the timing of the central bank's next interest rate hike, a Reuters poll showed on Friday after weak jobs and housing starts data suggested the economy will struggle in 2013.
The economic figures released on Friday were the latest in a string of dismal indicators. Earlier reports had prompted the Bank of Canada to say on January 23 that a rate hike would be further in the future than it had once thought.
The median forecast in Friday's Reuters poll of Canada's 12 primary dealers, the institutions that deal directly with the Bank of Canada as it carries out monetary policy, showed their median forecast for the next rate hike is still the first quarter of 2014, unchanged from a poll on January 23.
But the latest survey showed that since then six dealers have pushed their forecasts further into the future.
"We're becoming increasingly concerned about how soft growth will be," said Doug Porter, chief economist at BMO Capital Markets, which on Wednesday changed its target date for a rate hike to April 2014 from a month earlier.
Scotiabank went further, saying a rate hike won't happen until 2015. It had previously expected a move in the first quarter of next year, but it said the deteriorating economy and expectations the U.S. Federal Reserve will not tighten its monetary policy until at least 2015 have changed its view.
RARE TIGHTENING BIAS
The Canadian central bank has been an outlier among its peers in major economies, signaling since last April that rates would need to rise. The bank was the first to hike following the global financial crisis. Continued...