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Bank of Canada holds line on interest rates
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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.
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The 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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5 S' ]1 O. j; R( W' IMany economists had forecast a cut of a quarter of a percentage point.
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9 P! ~) d9 d) [) N7 C4 t5 pThe Bank of Canada is currently grappling with mixed signals — a slowing economy and inflation tensions.6 F$ ]7 f/ X6 p3 l
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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.
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" \- v" s5 B. m u+ fOn the other hand, inflation pressures are building, with oil topping at a record $139 US a barrel last week. Food prices also took a big jump in April.$ s2 `4 L! O+ i2 {; T4 y
& }3 E- P* |: Lhttp://www.cbc.ca/money/story/2008/06/10/bankdecisionrate.html |
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