HIGHLIGHTS-Bank of Canada's Carney speaks in Ottawa

Wed Oct 24, 2012 12:11pm EDT
 
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Oct 24 (Reuters) - Below are key quotes from an appearance by Bank of Canada Governor Mark Carney in Ottawa:

ON INTEREST RATES

"The case for adjustment of interest rates has become less imminent. But it is important to recognize, for both Canadians and then the subset of Canadians that are market participants and then broader global market participants, that given the fact that the Canadian economy is operating with a very small output gap, given that we are in an expansion, not a recovery, which is relatively unique in advanced economies, and given our outlook for albeit moderate global growth, the implications of that for our terms of trade and the outlook for Canadian growth and including in all of this the potential evolution of imbalances in the household sector, that over time rates are more likely to go up than not."

ON WHETHER CANADA IS AT TIPPING POINT BECAUSE OF HIGH HOUSEHOLD DEBT:

"We don't think that. That's certainly not our base case. Our expectation is exactly what you said. There will be this gradual adjustment in the pace of accumulation of household debt. That's one of the things that impact both the level of activity in the housing market and consumer expenditure. And that this adjustment will proceed in part, because of the measures that have been taken. That is our base case. There is obviously a risk that the adjustments could be more severe. We've outlined clearly that that is a risk. But that is not our expectation."

ON CHALLENGE OF LOW INTEREST RATE VS HOUSEHOLD DEBT:   Continued...