BoC defends pre-rate rise communication after BMO criticism

The Bank of Canada says that its communication before last week’s interest rate rise was in line with recent years, amid criticism that it left markets – and homeowners with mortgages – guessing.

BMO chief economist Doug Porter was critical, not of the rate rise itself, but that the central bank had made no statement between the rate hike in July and last week’s.

However, the BoC says that comments made about previous rate cuts having done their job were understood by many analysts as shown by the 50:50 chance assessed by the markets before last week’s hike.

Porter’s claims of a communication failure by the BoC led to a “great deal of uncertainty” followed by a “fairly violent market reaction.”

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