Poloz says slow first-quarter growth behind holding interest rate

The Bank of Canada is citing “softness” in the economy, as it held its benchmark interest rate steady at 1.25 per cent on Wednesday. Bank governor Stephen Poloz says rates are still likely to rise over time to manage inflation. (April 18, 2018) 1. SOUNDBITE: Stephen Poloz, Bank of Canada governor PLACELINE: Ottawa CREDIT: The Canadian Press STORYLINE: The Bank of Canada is maintaining its trend-setting interest rate as its careful assessment of the timing of future hikes continues amid a backdrop of moderating growth. The central bank, which kept its rate at 1.25 per cent Wednesday, said slower first-quarter growth of about 1.3 per cent was largely a result of housing markets' responses to stricter mortgage rules and sluggish exports. The bank had predicted the economy to expand by 2.5 per cent in the first three months of the year. It's expecting the economy to rebound in the second quarter with 2.5 per cent growth, in part because of rising foreign demand, to help Canada expand by two per cent for all of 2018. The economy saw three per cent growth in 2017.