In its policy statement today the Bank of Canada maintained both its key policy interest at 1% and its wait-and-see policy approach. Although the Bank judges that weaker external factors are offset by stronger domestic activity, we think it is still too optimistic about growth prospects for overall household expenditure. As such, there is nothing in the policy statement that persuades us to change our view on interest rates and still believe the Bank is likely to cut interest rates, to 0.50% from 1.00% by the end of the second quarter.