Bank of Canada says many uncertainties to outlook remain

Mon Nov 28, 2016 11:03pm EST
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By Alastair Sharp

TORONTO (Reuters) - Many of the uncertainties surrounding the economic outlook that the Bank of Canada faced at its last policy decision still remain, though the central bank has two major data reports yet to consider this week, Governor Stephen Poloz said on Monday.

In October, the bank held rates steady but said that it had actively considered cutting for the third time in two years.

The bank cited uncertainty on a number of fronts, including geopolitical factors and the impact of recent moves by the government to boost infrastructure spending and tighten mortgage rules.

"On most of those things, we have very little additional information since October, so very little has changed therefore in that analysis," Poloz told reporters on Monday.

Poloz said that uncertainty still needs to be monitored. The central bank will get reports on the current account and third-quarter growth this week, which should help the bank better understand the economic picture, Poloz said.

The bank is widely expected to hold rates where they are when it meets next week, though some think the market is too complacent about the prospect of further cuts following the U.S. election of Donald Trump.

Poloz said the bank would not incorporate U.S. policies into forecasts until they occur.

Poloz also made clear he had not put away the bank's toolkit of unconventional measures that could be used if necessary, which includes negative interest rates and large-scale asset purchases.   Continued...

A man is reflected in a window while walking past the Bank of Canada office in Ottawa, Ontario, Canada, May 25, 2016. REUTERS/Chris Wattie