News

The global economic recovery is proceeding at a somewhat faster pace than the Bank had anticipated, although risks remain elevated. Private domestic demand in the United States has picked up and will be reinforced by recently announced monetary and fiscal stimulus.

This is a report of the Governing Council of the Bank of Canada: Mark Carney, Tiff Macklem, John Murray, Timothy Lane, Jean Boivin and Agathe Côté. It presents the Bank’s outlook based on data received up to 14 January 2011.

The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

Why does household financial health matter to the Bank of Canada? It matters because how Canadians spend and how much they spend affect both the conduct of monetary policy and the stability of the financial system.

Overall, businesses continue to be positive about the outlook for the next 12 months. While survey responses generally still indicate modest growth, with many firms citing headwinds from strong competition and moderate demand, the strength in commodity prices has led to increased optimism among those firms tied to commodity-related activity.