BoC holds interest rates at 0.5 per cent, TSX closes lower
The Bank of Canada announced that the overnight interest rate was being held at 0.5 per cent amid concern that the global economy has failed to grow at the rate expected in its July outlook.
While the Alberta wildfires hit GDP in the second quarter of 2016, the bank expects “a substantial rebound” in growth for the second half of the year and noted that inflation is broadly in line with its target but the risk profile for inflation may have “tilted to the downside” since July.
There was also a warning over the Vancouver housing market and the imbalance in household budgets.
The main TSX index closed lower with healthcare and utilities higher.
Wall Street closed flat following the release of the Fed’s Beige Book which pointed to recent weaker economic data. The Nasdaq saw the only positive close to the session of the three main indexes.
Asian markets closed mixed earlier in the day while Europe closed higher despite weak German data.
The S&P/TSX Composite Index closed down 16.37 (0.11 per cent)
The Dow Jones closed down 0.33 (0.02 per cent)
Oil is trending higher (Brent $48.52, WTI $46.15 at 4.55pm)
Gold is trending lower (1349.70 at 4.55pm)
The loonie is valued at U$0.7751
Canadian firms not planning wage increases
Canadian employees should not expect much of a pay rise in the coming year according to a new survey from Mercer.
The report shows that economic uncertainty means that increases for 2016 are projected to be 2.6 per cent while 2017 increases will be 2.3 per cent.
When inflation is factored in, some workers will be significantly worse off especially in the energy sector where non-union workers are looking at just 1.3 per cent.
“These are some of the lowest overall salary increase projections we’ve seen since our survey began more than 20 years ago, reflecting ongoing concerns among employers about the health of the economy,” said Gordon Frost, market business leader for Mercer’s Canada Talent business. “This is also the first time our survey found the energy sector projecting salary increases below the other sectors.”