January 10, 2013 / 9:25 PM / in 5 years

BoC's Macklem sees near-term softness in economy

KINGSTON, Ontario, Jan 10 (Reuters) - Canada’s economy will likely be more sluggish than expected in the near term and the Bank of Canada will take that into account in its revised economic forecasts later this month, the Bank of Canada’s Senior Deputy Governor Tiff Macklem said on Thursday.

“We continue to expect economic activity to pick up through 2013, but near-term momentum now appears to be slightly softer than previously anticipated,” Macklem said.

“These and other developments will all be taken into consideration as we revise our economic projections, to be published on January 23 with the next interest rate decision,” he added.

Macklem, tipped by markets to replace Mark Carney as the next governor of the Bank of Canada, also said the bank may want to set rates higher than would otherwise be warranted, citing high household debt as a factor that would influence the timing and degree of any rate hikes.

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