Rate hikes urged for summer
 
From Herald News Services February 24, 2010
 
Central Bank - The Bank of Canada should uphold its conditional pledge to keep its key policy rate at 0.25 per cent until July, but should then embark on sharp rate hikes of 50 basis points at every announcement date until mid-2011, says an analysis prepared for the C.D. Howe Institute.

The call for sharp rate increases after June emerged Tuesday, one week before the Bank of Canada releases its latest interest rate statement.

Recent data indicate the Canadian economy likely expanded in the final quarter of 2009 at a faster pace than the central bank expected (four per cent versus 3.3 per cent), and inflation is now closer to the central bank's two per cent preferred target than it previously envisaged.

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