OTTAWA, ON (NEWS1130) – The Bank of Canada has left the key overnight interest rate unchanged at one per cent, but is signalling the days of super-low borrowing costs are nearing an end.
   
The bank says it’s because economies around the world and in Canada are doing better than it previously thought and inflation is stronger.
   
For Canada, the bank believes that means economic growth of 2.4 per cent this year, well above the two per cent expectation it set in January. However, the bank believes next year’s expansion will be more moderate at 2.2 per cent.
   
The bank envisions the economy will return to full capacity for the first time since the recession in the first half of next year – one or two quarters ahead of its expected pace.
   
In light of the reduced slack, the bank says some modest withdrawal of what it views as very stimulative interest rates may be in the offing.
   
The next policy setting is June 5. The central bank has kept interest rates at the current level since September 2010.