Bank of Canada's Carney reiterates need for eventual rate hike

Mon Feb 25, 2013 3:22pm EST
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* Bank of Canada sticks to message rate hike needed in time

* Weak data has pushed back market forecasts for rate hike

* Canadian interest rates are at near-record lows

By Russ Blinch

LONDON, Ontario, Feb 25 (Reuters) - The head of the Bank of Canada reiterated on Monday that the next move in the country's interest rates is likely to be higher, even as he acknowledged growth in the last quarter of 2012 might have been softer than predicted.

Governor Mark Carney noted that the central bank only last month said there's ultimately a need for some withdrawal of monetary policy stimulus, though the prospect was "was less imminent."

"Obviously we stand by that assessment," he told reporters after a speech in London, Ontario.

Some economists last week pushed their forecasts for the timing of the next Canadian rate hike further into the future after data showed the economy registered its lowest inflation in more than three years last month and retail sales sank in December.

Canadian interest rates are at a near-record low 1 percent. The Bank of Canada has said since early last year its next move is likely to be a rate increase, making it the only Group of Seven central bank with a tightening bias.   Continued...