UPDATE 1-Bank of Canada's Carney sees little rate-hike pressure

Tue Apr 23, 2013 12:01pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* Carney says encouraged by slowing debt accumulation

* Macklem says too soon to let guard down despite cooler housing mkt

* Rate hike is the most likely next move by Bank of Canada

By Louise Egan and David Ljunggren

OTTAWA, April 23 (Reuters) - Outgoing Bank of Canada Governor Mark Carney signaled on Tuesday he feels little pressure to raise interest rates any time soon, saying he was "very encouraged" that Canadians were stabilizing their debt loads and that the housing market was cooling.

"I would say that as we sit here today, we are encouraged by the fact that the rate of debt accumulation has slowed," Carney told lawmakers.

The household debt-to-income ratio, which now sits at an all-time high of 165 percent, should level off this year after rising steadily for the past few years, he said. Various housing market indicators are also showing improvement.

But Tiff Macklem, senior deputy governor at the central bank and seen as the most likely to replace Carney when he leaves in June to run the Bank of England, said it's too early to say that those risks has disappeared completely.

"House prices are starting to stabilize, but they are high. So the vulnerabilities are still there and it's important that this gradual evolution continues ... it's too soon to let down our guard and if we see an acceleration, yes, we need to look at the measures we can take," he said.   Continued...