July 21, 2008 / 12:50 AM / in 9 years

No rate relief from Bank of Canada, provinces told

OTTAWA (Reuters) - The Canadian provinces that are hurting the most from the U.S. slowdown -- Ontario and Quebec -- were told on Friday not to expect any rate relief from the Bank of Canada.

Carney met with provincial leaders on Friday in Quebec City. Ontario Premier Dalton McGuinty said he pressed the case for interest rate cuts in order to help struggling manufacturers in his province. But Carney said he was more concerned about rising inflation, McGuinty told reporters after the meeting.

“He certainly conveyed to me his understanding of both the challenges and opportunities associated with the Ontario economy,” McGuinty said.

“Whereas I might argue about the challenge associated with interest rates where we find them today, he would argue that he’s got to keep his eye on the inflationary ball,” he said.

Quebec Premier Jean Charest said Carney largely repeated the central bank’s economic outlook, published on Thursday, in which it projected inflation rising beyond 4 percent by early next year and economic growth picking up momentum later this year.

The bank signaled on Tuesday it plans to keep interest rates unchanged at 3 percent.

Reporting by Louise Egan; editing by Rob Wilson

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