The recent events in Greece have created an unprecedented situation and one which is causing ripples throughout the world’s economies. It has meant a surge in speculation by analysts about whether the bank of Canada will take a pre-emptive strike against potential weakness emanating from the Eurozone. However the talk of an interest rate cut was already rife with some economists suggesting that it could happen as soon as next Wednesday when the BoC meets. Although there are some parts of the economy that would benefit from a rate cut the bank will be mindful of balancing growth with over-fuelling the housing market. Derek Holt of Scotia Economists believes that there won’t be a cut as it would “risk inflaming housing imbalances” while Douglas Porter of BMO says that Stephen Poloz may see that as a risk worth taking.
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