Interest Rates Set To Fall

The Bank of Canada will cut the prime rate by the 2nd quarter of 2007 in an effort to dampen an economic slowdown in the country, according to the Laurentian Bank's economic & financial outlook released today.

The Laurentian report states "downside risks to the Canadian economy outweigh any upside risks and that lower rates will be used to counter an economy in the midst of a significant slowdown."

Laurentian predicts The Bank of Canada will cut the overnight rate to 3.75% by mid-2007 from the current 4.25% "to ensure any economic slowdown is moderate and short-lived".

This is in line with what most experts have been predicting, and will result in Canadian Mortgage Rates falling by approximately the same amount (50 basis points).

• Bank of Canada

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