Interest rate hikes a long way off

Good news for anyone taking out or renewing a mortgage!

OTTAWA—Faced with an increasingly bleak global economic picture, Bank of Canada Governor Mark Carney has pulled back from his oft-repeated plan to begin pushing up interest rates to head off a possible burst of inflation.

The central bank on Wednesday kept its trend-setting overnight rate at 1 per cent and signaled any increase in borrowing costs is a long way off.

The shift in tone was a stark recognition that the global economic recovery is floundering amid continuing weak growth in the United States and financial market turmoil in Europe.

“The European sovereign debt crisis has intensified, a broad range of data has signaled slower global growth, and financial market volatility has increased sharply,” Carney noted in a statement accompanying the rate-setting decision.

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