Specifically, governor Stephen Poloz highlighted the risk from an unusual “unwinding” of the high levels of mortgage debt and high house prices.
He said that as the economy improves the risk from household debt should reduce but that “further weakness in the resource sector or a rapid rise in global interest rates, could have sizable negative effects.”
Although there was positivity in Poloz’s speech, the bank is concerned that consumer borrowing is currently driving growth.
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In making its latest forecast for the Canadian economy and holding interest rates at 0.5 per cent, the Bank of Canada sounded a familiar note of caution about the housing market.