OTTAWA - The Bank of Canada has kept its trend-setting interest rate at one per cent, but is warning of downside risks to the global and Canadian economies.
The central bank hasn't budged from the one-per-cent level in almost four years and says nothing has occurred in the past few months to warrant a change from what it calls a stimulative policy.
If anything, the bank says the downside risks to the economy have increased since its last pronouncement in April.
The bank says global conditions, particularly in the United States, have weakened somewhat from what was anticipated.
And the Canadian economy recorded a below-expectations 1.2 per cent growth rate in the first quarter, which was slightly less than the bank had forecast.
But the bank attributes the weak start of 2014 to severe weather conditions and supply constraints, adding that it believes the ingredients are still there for a pick-up in exports and increased business investment going forward.
On the housing front, the bank says it sees continued signs of a soft landing in the market.
