Keep overnight rate target on hold, C.D. Howe council tells Bank of Canada

TORONTO – The C.D. Howe Institute’s monetary policy council is recommending the Bank of Canada keep its target for the overnight rate on hold when it makes its rate announcement next week.

Seven members of the think tank’s council voted to keep the key rate on hold at 0.75 per cent, while four supported a cut to 0.5 per cent.

The split in opinion among members of the group comes amid concerns about the economy and speculation Canada slipped into a recession in the first half of the year.

The Bank of Canada is widely expected to cut its economic outlook for the year when it releases its monetary policy report along with its rate announcement next week.

In its April outlook, the central bank predicted economic growth in Canada of 1.9 per cent this year.

The International Monetary Fund cut its outlook for Canada to 1.5 per cent on Thursday as part of its downgrade for the global economy.