BREAKING NEWS FROM THE GLOBE AND MAIL
OTTAWA — The Bank of Canada left its benchmark interest rate at 3 per cent and predicted raging oil and food prices would cause inflation to surge past 4 per cent by early next year.
Governor Mark Carney and his five deputies on the governing council also cut their estimate for economic growth for 2008 to 1 per cent, which would be the weakest in almost two decades, citing “protracted weakness” in the U.S. economy and “ongoing turbulence” in financial markets.
The central bank’s decision to leave borrowing costs unchanged suggests Mr. Carney’s biggest concern is keeping a lid on Canadians’ expectations about prices. Policy makers raise and lower interest rates to keep inflation advancing at an annual rate of 2 per cent and are uncomfortable with