MNI POLICY:BOC DepGov: >

By Courtney Tower

     OTTAWA (MNI) - Following are the key points from a speech by Bank 

of Canada Deputy Governor Lynn Patterson on Thursday, to the 

Hamilton, Ontario, Chamber of Commerce, saying that more time is needed 

for the Bank to change its present 1.75% policy interest rate.

     - As the BOC had announced in its statement Wednesday maintaining 

the overnight rate at 1.75%, and saying that the economic outlook 

"continues to warrant a policy interest rate that is below its neutral 

range (estimated by BOC at 2.5%-3.5%)," Patterson said a dip in the 

economy had been expected but the first half of 2019 will show weaker 

growth than anticipated. The BOC had expected the economy "was in for a 

detour" but now that detour likely will last "longer than we had 

expected." 

     - The BOC has been disappointed by the data on exports, business 

investment, and consumption, although there is strength in the jobs 

market and in rising worker wages, she said. She saw weaker growth for 

the first half of this year, with a pickup in the economy "later in the 

year." There was no suggestion as to when in the second half that pickup 

would occur or how strong it might be. 

     - Patterson zeroed in particularly on consumer spending, which has 

been tailing off from years of being a pillar of the economy. She noted 

a continuing decline in 20018 and so far in 2019 in consumer spending, 

because of various domestic uncertainties and the effects of higher 

interest rates. There have been declines in growth of both mortgage and 

consumer spending, she noted. 

     - Categories more sensitive to interest rates "are continuing to 

soften," she said. But she repeated that the Bank needs more data in 

order to determine the factors at play in reducing consumer spending. 

     - Patterson did note that most households are managing their 

debt levels, according to data the Bank has studied. 

--MNI Ottawa Bureau; yali.ndiaye@marketnews.com 

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