In its summary of deliberations released on Wednesday, the central bank said the main reasons its board is considering another rate hike are the resilience of economic growth, the potential difficulty of pushing inflation from 3% to 2% and the risk of taking too long to wait to react to persistent inflationary pressures.
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The central bank appears optimistic that inflation will slow to 3% by mid-year, but fears the return to 2% will take longer as service prices remain high.
In the end, the Bank of Canada left interest rates on hold at 4.5% on April 12 and decided to await further economic data to see if rates should rise further.
In its summary, the central bank said it was taking into account its outlook for growth and inflation, which are broadly unchanged, and said it saw signs that demand, inflation and jobs will ease in the coming quarters.
The Bank of Canada also left the door open for further rate hikes, warning in its latest decision that Canadians should not expect rate cuts this year.
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