BMO Capital Markets pushed its rate hikes forecast back to 2013 on Tuesday, citing continued serious economic risks both home and abroad.
The new forecast pushes the expected time frame for the Bank of Canada to raise its benchmark interest rates back from previous expectations of the second half of 2012.
As recently as this spring, economists had been speculating about a rate hike before the end of 2011, but the market turmoil of the past few months sparked by the eurozone debt crisis has changed all that.
“As global economic risks have escalated, casting commodity prices and the Canadian dollar much weaker, the Bank of Canada’s diminishing tightening bias has probably diminished further,” Michael Gregory, senior economist with BMO Capital Markets, said in a report.
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