December 3, 2014 / 11:44 PM / 4 years ago

Bank of Canada head says oil a growth risk, but U.S. encouraging

Bank of Canada Governor Stephen Poloz takes part in a news conference upon the release of the Financial System Review in Ottawa June 12, 2014. REUTERS/Chris Wattie

TORONTO (Reuters) - A sharp drop in the price of oil is a risk to the Canadian economy and inflation, but this is partly offset by encouraging signs from the U.S. economy, the head of the Bank of Canada said on Wednesday.

BoC Governor Stephen Poloz also said there is plenty of capacity for the economy to grow without triggering inflation.

“We think there is plenty of capacity in the economy. We take comprehensive measure of how much capacity there is in the labor market indicators, output indicators. The fact is there is a lot of room for the economy to grow,” he said during an on-stage interview in Toronto.

Reporting by Jeffrey Hodgson and Alastair Sharp; editing by G Crosse

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