Reading Between The Lines in Bank of Canada Announcement

The Bank of Canada has announced No change in Prime Lending Rate, remaining at 1.00%.... exactly where it has been since 2010. This is the longest stretch on record without a Bank of Canada Rate Change.

Below are some of the key points (easy to understand!) to help you read between the lines!

The Bank of Canada said:
"The outlook for the global economy has deteriorated (since October)."
"...very favourable financing conditions are expected to buttress consumer spending and housing activity."
"...the ratio of household debt to income is projected to rise further."
"The economy is only anticipated to return to full capacity by the third quarter of 2013, one quarter earlier than was expected in October."
"With the target interest rate near historic lows and the financial system functioning well, there is considerable monetary policy stimulus in Canada."

Analysts reading between the lines say the Banks statements imply low odds of further rate cuts anytime soon. In fact, the next Bank of Canada Rate meeting is March 8, 2012. . From a mortgage standpoint, the immediate result of all this is that prime rate should remain at 3.00%. That means payments stay the same for existing variable-rate mortgage holders.