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Bank of Canada holds line on interest rates' i. ]" Y$ H j6 K. Y
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The Bank of Canada gave the market a surprise on Tuesday as it left a key interest rate unchanged amid inflation worries.! j/ i" z: b5 z
4 F8 c$ I# ]1 a5 ? N2 `- UThe central bank left the overnight rate — what the country's big banks charge each other for overnight loans — steady at three per cent.
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Many economists had forecast a cut of a quarter of a percentage point.
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The Bank of Canada is currently grappling with mixed signals — a slowing economy and inflation tensions./ }1 p2 Z; t* }9 L# w4 g* E8 V K
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The country's GDP unexpectedly contracted by 0.3 per cent annualized in the first quarter. Housing is cooling, last month's job-creation figures were the lowest this year and a couple of recent surveys show consumer confidence in Canada has fallen to a six-year low.& Z2 M3 a6 h9 g5 [. Q( o
& J. p2 S& U5 }6 W* eOn the other hand, inflation pressures are building, with oil topping at a record $139 US a barrel last week. Food prices also took a big jump in April.
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http://www.cbc.ca/money/story/2008/06/10/bankdecisionrate.html |
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