OTTAWA: The Bank of Canada held its key interest rate steady at 1.75 per cent on Wednesday, as expected, but said it would be watching for any further signs the economy was slowing.

While “some recent trade developments have been positive” -- a reference to the recent signing of a trade deal with the United States and Mexico — the policy statement cautioned that “there remains a high degree of uncertainty and geopolitical tensions have re-emerged.”

The statement noted that signs of weaker domestic data could mean global factors “have been affecting Can­­a­da’s economy to a greater extent than was predicted.”

Inflation is not a key concern, as the government reported Wednesday that consumer prices held steady in December, rising 2.2pc higher than a year earlier.

Excluding gasoline, inflation was just 2pc -- the lowest in just over a year.

Even after the US Federal Reserve cut the benchmark lending rate three times last year amid concerns about a slowing economy, the Bank of Canada has not moved since October 2018.

But now policymakers point to weakening business investment, declining job creation and softening consumer confidence.

Published in Dawn, January 23rd, 2020