UPDATE 2-Bank of Canada repeats rate message, sees debt slowing

Tue Oct 30, 2012 6:09pm EDT
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* Carney says household debt growth may be slowing

* Sees some cooling in housing market

* Repeats that rate hikes will likely be needed over time

By Louise Egan

OTTAWA, Oct 30 (Reuters) - There are signs that Canada's soaring household debt and its heated housing market - two of the biggest headaches for the country's policymakers - are decelerating, Bank of Canada Governor Mark Carney said on Tuesday

Speaking to legislators, Carney also maintained his stance as the most hawkish central banker in the Group of Seven rich countries, saying the bank is more inclined to raise interest rates than to lower them, although not any time soon.

He said there have been "mixed signals" on the issue of record high household debt in Canada since several moves were made by the federal government and its agencies.

Among them, the government tightened mortgage rules, the financial regulator introduced new mortgage lending standards, and the central bank has hinted since April at higher interest rates to come.

"And I say that in a positive sense ... there are some signs that accumulation of household debt is slowing," Carney said in response to a question from a member of the House of Commons Standing Committee on Finance.   Continued...