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We can expect the Bank of Canada’s overnight rate not to make any upward movement until at least the end of 2020, according to a new Reuters poll. This was the majority opinion of the forty economists who participated in the poll. The same group also stated that there is a 40% chance that we may even seen one or two rate cuts in that time. The participants cited a slow economy as well as global trade tensions as reasons for these statistics.

Despite the results of this poll the Bank of Canada has a bit of a different outlook. The Bank expects Canada’s economy to make turn for the better during the second half of 2019, but this isn’t an opinion shared by everybody. One poll participant, Morgan Stanley, stated, “We see little impetus for policymakers to resume rate hikes over our forecast horizon, as sluggish growth and lingering slack in the economy will continue to warrant leaving some policy accommodation in place.”

If the present economic climate worsens the Bank of Canada is likely going to have to make some cuts. Stanley continued by saying, “If growth fails to show any convincing signs of a rebound in 2019, we think the risks of rate cuts will increase, and given our sluggish outlook we place a subjective 40 per cent probability that the BoC will deliver at least one 25 basis point rate cut over the next 12 months.”

The pending US-China trade agreement has been like a wet blanket on the Canadian economy. A separate Reuters poll taken earlier this month showed that the chances of the US entering a recession have increased. The US economy directly impacts the Canadian economy because they are our largest trading partner. If the US goes into a recession, chances are Canada won’t be far behind. Another Reuters poll performed in April revealed that Canada has a 20% chance of falling into a recession in the next 12 months, and a 27.5% chance of recession in the next 24 months.

Most speculators agree that we aren’t likely to see any interest rate hikes from the Bank of Canada before the end of 2020, many expect to see cuts, and a fair few anticipate one or two hikes in that time.

This means your variable mortgage rate is relatively safe for the next year or two. Yet another Reuters poll taken this month showed that housing prices are likely to stay unchanged this year but are expected to increase by 1.7% in 2019.