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Bank of Canada holds line on interest rates
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. |0 a7 F) N+ t) d# t2 d* GThe Bank of Canada gave the market a surprise on Tuesday as it left a key interest rate unchanged amid inflation worries.8 U. j$ f- S3 f4 f6 K
K k7 S2 R! B6 ~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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+ a6 d" _5 f0 x ?( UMany economists had forecast a cut of a quarter of a percentage point.( c. d2 x8 v$ W9 e
4 c8 b" P. ~7 @0 G dThe Bank of Canada is currently grappling with mixed signals — a slowing economy and inflation tensions.
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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.3 N) B" I Z* l! D9 n1 f. S
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On 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.0 @2 u8 p9 d) |% T% A
4 C' F# r" K% `- Ohttp://www.cbc.ca/money/story/2008/06/10/bankdecisionrate.html |
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